On August 27, The Reserve Bank of India levied a heavy monetary penalty of Rs 25 lakh on New India Co-operative Bank Ltd (Mumbai) and Rs 20 lakh on The Jalgaon People’s Co-operative Bank (Jalgaon).
New India Co-operative Bank faced the monetary penalty due to non-compliance of RBI directions following Frauds in UCBs which occurred due to alterations in monitoring and reporting mechanism. While The Jalgaon People’s Co-operative Bank was penalised due to non-compliance as per the RBI rules on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.
The central bank conducted statutory inspections of both the banks’ financial positions on March 31, 2019, and the inspection report revealed non-compliance with the norms.
Following which the central bank earmarked immediate notices to the two co-operative banks. At hearing the bank’s reply, the central bank arrived at a cessation that the charges were backed with enough evidence also the warrant imposed (monetary penalty) was absolutely justified.
The Reserve Bank of India (RBI) earlier on August 23 levied a monetary penalty of Rs 27.50 lakh on Dhanlaxmi Bank, a private sector bank applying similar charges. The examination of the Risk Assessment Report and Inspection Report about the same revealed violation of certain provisions of the Depositor Education and Awareness Fund Scheme, the RBI averred.