The RBI has imposed penalties on five banks for violation of rules. The RBI has released press information regarding the penalty and has cited various reasons for the penalty.
The Amod Nagric Co-operative Bank Ltd., Amod, Gujarat
The Reserve Bank of India (RBI), through an order dated November 13, 2024, imposed a monetary penalty of ₹1 lakh on The Amod Nagric Co-operative Bank Ltd., Amod, Dist. Bharuch, Gujarat, for non-compliance with RBI directions on Loans and Advances to Directors, Relatives, and Firms and Know Your Customer (KYC) norms. The penalty was imposed under sections 47A(1)(c), 46(4)(i), and 56 of the Banking Regulation Act, 1949.
During a statutory inspection conducted with reference to the bank’s financial position as of March 31, 2023, it was found that the bank:
- Sanctioned loans where a director’s relative stood as guarantor.
- Failed to upload KYC records of certain accounts to the Central KYC Records Registry within the prescribed timeline.
The Karjan Nagarik Sahakari Bank Ltd., Karjan, Gujarat
By an order dated November 15, 2024, the RBI imposed a penalty of ₹2.1 lakh on The Karjan Nagarik Sahakari Bank Ltd., Vadodara, Gujarat. This penalty was for contraventions under sections 18, 26A, and 56 of the Banking Regulation Act, and non-compliance with directions related to Membership of Credit Information Companies (CICs), Placement of Deposits with Other Banks, and KYC norms.
Supervisory findings revealed the bank:
- Failed to transfer unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time.
- Did not maintain the required Cash Reserve Ratio for certain days.
- Neglected to submit borrower credit information to CICs.
- Breached prudential inter-bank counterparty exposure limits.
- Did not perform risk-based KYC updates for certain accounts.
The Rajula Nagrik Sahakari Bank Ltd., Rajula, Gujarat
The RBI imposed a monetary penalty of ₹1.25 lakh on The Rajula Nagrik Sahakari Bank Ltd., Rajula, Amreli, Gujarat, as per an order dated November 13, 2024. The bank was found to have:
- Sanctioned cash credit limits where relatives of directors acted as guarantors.
- Failed to classify certain accounts as inoperative or dormant where no customer-initiated transaction occurred for over two years.
The Vijay Commercial Co-operative Bank Ltd., Rajkot, Gujarat
On November 15, 2024, the RBI imposed a ₹1 lakh penalty on The Vijay Commercial Co-operative Bank Ltd., Rajkot, for non-compliance with KYC norms. The bank had failed to conduct periodic reviews of the risk categorization of certain accounts at least once every six months.
The Sundargarh District Central Co-operative Bank Ltd., Odisha
A monetary penalty of ₹3 lakh was imposed on The Sundargarh District Central Co-operative Bank Ltd., Odisha, through an order dated November 13, 2024, for contraventions of sections 20 and 26A of the Banking Regulation Act and non-compliance with KYC norms.
The bank was found to have:
- Granted loans to its Directors.
- Failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund.
- Neglected Customer Due Diligence procedures for certain new accounts.
These penalties are based on deficiencies in regulatory compliance and do not impact the validity of any customer transactions. Further actions may be initiated by the RBI as necessary.