RBI imposes sanctions on four cooperative banks for non-compliance

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The Reserve Bank said on Tuesday it had imposed sanctions on four cooperative banks, including a fine of Rs 112.50 lakh on Hyderabad-based Andhra Pradesh Mahesh Co-operative Urban Bank for violating certain regulatory guidelines. A fine of Rs 62.50 lakh was imposed on the Ahmedabad Mercantile cooperative bank, Ahmedabad; Rs 37.50 lakh on SVC Co-operative Bank, Mumbai; and Rs 25 lakh on Saraswat Cooperative Bank, Mumbai.

The penalty imposed on the Andhra Pradesh Mahesh Co-operative Urban Bank was for failure to comply with instructions issued by the RBI contained in the general instructions on “Interest Rate on Deposits” and “Know Your Customer”. The Ahmedabad Mercantile Co-operative Bank was sanctioned for violating the standards contained in the general instructions on “Interest rate on deposits”.

According to the RBI, it imposed a penalty on the SVC Co-operative Bank for failing to comply with instructions on the “Interest rate on deposits” and the “Fraud monitoring and reporting mechanism”. Saraswat Cooperative Bank has been sanctioned for failing to comply with instructions on “Interest Rate on Deposits” and “Maintenance of Deposit Accounts”.

The sanctions, the RBI said, were imposed for breaches of regulatory compliance and are not intended to rule on the validity of any transaction or agreement that banks have with their customers.

Also Read: Credit Growth to Industrial Sector Remained Negative in FY21 Due to COVID-19 Crisis: RBI

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