RBI cancelled Banking License of 1 Bank and penalized 4 other banks

Last Updated on September 23, 2023 by Brajesh

RBI cancelled banking license of Ananthashayanam Co-operative Bank Limited and imposed monetary penalty on four other co-operative banks due to non compliance . The Citizens’ Co-operative Bank, HCBL Co-operative Bank, Shree Warana Sahakari Bank and The State Transport Co-operative Bank.

RBI cancelled banking license

RBI cancelled banking license of Ananthashayanam Co-operative Bank Limited on 21st September 2023, however allowed it to function as non banking institution. Henceforth Ananthashayanam Co-operative Bank Limited will not carry on the business of banking within the meaning of Sec 5(b) of the Act.

RBI imposes monetary penalty

Reserve Bank Of India has imposed monetary penalty on four co-operative banks due to regulatory deficiencies. Four banks are The Citizens’ Co-operative Bank, HCBL Co-operative Bank, Shree Warana Sahakari Bank and The State Transport Co-operative Bank.

RBI has imposed monetary penalty of ₹ 6 lakh on The Citizens’ Co-operative Bank, ₹11 Lakh on HCBL Co-operative Bank, ₹ 1 Lakh on Shree Warana Sahakari Bank and ₹2 Lakh on Shree Warana Sahakari Bank and The State Transport Co-operative Bank.

The Citizens’ Co-operative Bank

₹6 Lakh penalty is imposed on The Citizens’ Co-operative Bank for certain non compliance issued by RBI under SAF i.e. Supervisory Action Framework. Non compliance has also been observed under ‘Exposure norms and Statutory/ Other Restrictions – UCBs  The Bank has issued fresh loan and advance and also allowed cash credit facilities to be overdrawn in violation of specific norms issued under SAF and breached prudential inter-bank (gross) exposure limit and inter-bank counterparty limit

HCBL Co-operative Bank

HCBL Cooperative Bank has been penalised Rs11 Lakh for non-compliance with the directions issued by RBI on loans and advances to directors, relatives and firms concerns in which they are interested and specific directions issued by RBI under the supervisory action framework (SAF).

Shree Warana Sahakari Bank

Shree Warana Sahakari Bank has been penalised Rs1 Lakh for non-compliance with the directions issued by RBI on maintenance of deposit accounts- primary UCBs. An inspection report of the Bank based on its financial position as of 31 March 2022 revealed that Shree Warana Sahakari Bank was collecting a fixed penalty for the shortfall in maintenance of minimum balance in the savings bank accounts instead of proportionate to the extent of the shortfall.

The State Transport Co-operative Bank

Mumbai-based State Transport Cooperative Bank was fined Rs1 lakh for non-compliance with the directions issued by RBI on the depositor education and awareness fund (DEAF) scheme. The RAR and all related correspondence revealed that the Bank had failed to transfer amounts which were eligible for transfer to DEAF Fund.

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