The Reserve Bank of India (RBI) has, by an order last week, imposed monetary penalties on seven cooperative banks in different parts of the country. The list of these banks is summarised as under:
Indian Mercantile Co-operative Bank Ltd., Lucknow --- --- ₹20.00 lakh
Zoroastrian Co-operative Bank Ltd., Bombay --- --- ₹1.25 crore
Bharat Co-operative Bank (Mumbai) Limited --- --- ₹50.00 lakh
Tiruchirappalli District Central Cooperative Bank Ltd., Tiruchirappalli, Tamil Nadu --- --- --- --- ₹1.00 lakh
The Cumbum Co-operative Town Bank Ltd., Cumbum, Prakasam District, Andhra Pradesh --- --- --- ₹3.00 lakh
The Chittoor Co-operative Town Bank Limited, Chittoor, Andhra Pradesh ₹6.00 lakh
The National Co-operative Bank Limited, Bengaluru, Karnataka --- ₹2.00 lakh
These actions are based on a deficiency in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with its customers.
The country's regulator of banks the Reserve Bank has a mechanism to control and watch the functionality of its member banks. The RBI found the above-mentioned banks guilty of contravention of directions issued time-to-time.
These penalties have been imposed in the exercise of powers vested in RBI conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. This action is based on a deficiency in regulatory compliance.