Two cooperative banks in Gujarat and Maharashtra were recently hit with financial fines by the Reserve Bank of India (RBI) for breaking key banking regulations. Based on infractions of RBI regulations, these fines were levied following RBI inspections and hearings.
Saibaba Nagari Sahakari Bank Maryadit, situated in Sailu, Maharashtra, has been fined ₹50,000 by the RBI for breaking KYC (Know Your Customer) regulations.
The bank failed to upload certain customers' KYC information to the Central KYC Records Registry (CKYCR) in a timely manner. Additionally, the bank did not update some customers' KYC information on a regular basis as required by RBI regulations.
RBI's actions is Based on the bank's financial statements as of March 31, 2024, RBI carried out an inspection. Following the identification of the problems, the RBI sent the bank a notice requesting an explanation for why a penalty should not be applied.
Following an examination of the bank's written and verbal responses, the RBI determined that the penalty was appropriate because the bank had broken the guidelines.
Shree Kadi Nagarik Sahakari Bank Ltd., situated in Gujarat's Mehsana district, has also been hit with a far higher fine of ₹14.30 lakh by the RBI.
The punishment was applied because of violation of RBI's contribution regulations, the bank gave funds to a trust in which a director's relative had a stake.
Additionally, the bank neglected to properly supervise the end-use of loans by failing to verify how some loan funds were used, which is a major violation of lending criteria.
The RBI's procedure is Similar to the last instance, the RBI examined the bank in light of its financial standing as of March 31, 2024.
After hearing the bank's explanation and examining the written responses, the RBI determined that the infractions were legitimate and levied the fine.
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