The Reserve Bank of India (RBI) has imposed monetary penalties on two cooperative banks for not adhering to the prescribed norms. The central bank's enforcement action comes as part of its ongoing efforts to ensure strict compliance with banking regulations.
The RBI sanctioned Sangli Sahakari Bank Limited with a ₹2 lakh penalty today for violating 'Board of Directors-UCBs' protocols. This decision was based on the bank's financial position and issues related to regulatory compliance. The punitive action follows an inspection that took place on March 31, 2022, which revealed non-compliance in renewing a loan associated with a director’s relative. After reviewing the findings of the Risk Assessment Report, the RBI had issued a show-cause notice to the bank. The bank's response was deemed insufficient, leading to the imposition of the penalty, as confirmed by Chief General Manager Yogesh Dayal through a Press Release.
In a separate incident, Pudukkottai Co-operative Town Bank was penalized with a ₹25,000 fine for non-compliance with Board of Directors regulations. The RBI utilized Sections 47A(1)(c), 46(4)(i), and 56 of the Banking Regulation Act to enforce this action, as announced today.
These penalties are indicative of the RBI's commitment to maintaining the integrity of the banking system by ensuring that all financial entities operate within the framework set by regulatory authorities. The actions taken against Sangli Sahakari Bank Limited and Pudukkottai Co-operative Town Bank serve as a reminder to other institutions about the importance of adhering to regulatory guidelines and the potential consequences of non-compliance.
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