Maharashtra’s Varud Urban Co-operative Bank, Varud, Madhya Pradesh’s District Co-operative Central Bank Maryadit, Chhindwara and Maharashtra’s Yavatmal Urban Co-operative Bank, Yavatmal have been fined for violating KYC norms.
RBI imposed penalty on cooperative banks
The Reserve Bank of India (RBI) has imposed fines on eight co-operative banks for violating several rules. A fine of Rs 40 lakh has been imposed on Gujarat’s Mehsana Urban Co-operative Bank. According to the Reserve Bank, the Mehsana Urban Co-operative Bank has been fined for non-compliance of certain provisions of the Reserve Bank of India (Co-operative Banks – Rate of Interest on Deposits) Directions, 2016. The central bank said in a statement on Monday that a fine of Rs 7 lakh has been imposed on Indapur Urban Cooperative Bank, Indapur, Maharashtra for violation of certain provisions related to loans.
Meanwhile, Maharashtra’s Varud Urban Co-operative Bank, Varud, Madhya Pradesh’s District Co-operative Central Bank Maryadit, Chhindwara and Maharashtra’s Yavatmal Urban Co-operative Bank, Yavatmal have been fined for violating Know Your Customer (KYC) norms. . Apart from this, a fine of Rs 25 lakh has been imposed on Chhattisgarh State Cooperative Bank Maryadit, Raipur for non-compliance of certain KYC provisions. Apart from this, a Co-operative Bank of Guna and Goa State Co-operative Bank of Panaji have also been fined.
Earlier these banks were fined
Earlier in July, the Reserve Bank had imposed a fine on two cooperative banks of Uttar Pradesh. This action was taken by the Reserve Bank under the Banking Regulation Act. The names of the co-operative banks against which action has been taken are Lucknow Co-operative Bank and Urban Co-operative Bank Ltd., Sitapur. Till further orders, customers of these two banks will not be able to withdraw even a limited amount of money from their accounts. The Reserve Bank has imposed restrictions against both the banks for the next 6 months. According to the order, customers of Lucknow Urban Co-operative Bank will not be able to withdraw an amount exceeding Rs 30,000. This has been said in the statement of RBI. Customers of Urban Co-operative Bank of Sitapur will be able to withdraw up to Rs 50,000 from their account.
Along with the action, the Reserve Bank has made one thing clear that it will not affect the transactions of the customers. The agreement between the bank and the customers will remain as before and there will be no change in it. Under the penalty, the bank has to pay the money and there is no difference in its work. There will be no change in the transactions or account dealings of customers with the Bank.
Why does the Reserve Bank act?
Actually, the Reserve Bank has made some of its provisions, which have to be followed by all types of banks. The Reserve Bank also monitors it all the time and banks themselves have to share their information with the Reserve Bank. If any discrepancy is found in these provisions, then the Reserve Bank takes action. The Reserve Bank also takes information about the financial position of the banks under its supervision. If the condition of a bank seems to be bad and there is a danger of losing the money of the customers, then the Reserve Bank can impose restrictions on that bank. Along with this, customers can set the limit for withdrawing money. This kind of action keeps happening from time to time.