Page 14 - Banking Finance September 2023

Co-Operative Bank

News

RBI imposes monetary (SAF) and certain provision of 'RBI's KYC place the system of periodic review of
directions. The bank had granted fresh risk categorisation of accounts.
penalty on 4 co-operative
loans and advances carrying risk
RBI has mandated in its KYC regula-
banks weights of more than 100% in violation tions that banks should classify custom-
of specific directions issued under SAF
The Reserve Bank of India (RBI) has ers as low, medium and high risk cat-
and failed to put in place a system of
imposed monetary penalties on egory, based on the assessment and
periodic review of risk categorisation
four co-operative banks for deficiencies risk perception of the lender.
of accounts.
in regulatory compliance. These
banks are Shri Vinayak Sahakari Bank,
RBI puts restrictions on
Shreeji Bhatia Cooperative Bank, RBI fines Sarvodaya Co-
Mizoram Urban Cooperative Develop- two co-operative banks
operative Bank Rs. 2 lakh
ment Bank and Vita Urban Co-opera- The Reserve Bank of India (RBI) on
for KYC norms violation
tive Bank. August 29 said it has imposed restric-
Reserve Bank of India (RBI) has im- tions on Ajantha Urban Co-operative
The Reserve Bank imposed a monetary
posed a fine of Rs. 2 lakh on Mumbai- Bank and Purvanchal Co-operative
penalty of Rs. 1.50 lakh on Vita Urban
based Sarvodaya Co-operative Bank for Bank from the close of business on
Co-operative Bank Ltd., Vita,
violation of know your customer (KYC) August 29.
Maharashtra (the bank) for contraven-
regulations.
tion of provisions of certain banking The banks cannot grant or renew any
norms and directions issued by the “The Reserve Bank of India has im- loans and advances, make any invest-
apex bank on 'Maintenance of Deposit posed, by an order dated September ment, incur any liability including bor-
Accounts'. The bank had not trans- 06, 2021, a monetary penalty of Rs. rowing of funds and acceptance of
ferred the eligible amount to Deposi- 2.00 lakh on Sarvodaya Cooperative fresh deposits, disburse or agree to
tor Education and Awareness Fund Bank Ltd., Bhandup (W), Mumbai (the disburse any payment whether in dis-
(DEAF) and had not conducted annual bank) for contravention of/noncompli- charge of its liabilities and obligations
review of inoperative accounts. ance with directions issued by RBI on or otherwise, the RBI said.
Know Your Customers (KYC)," the bank-
The Mizoram Urban Cooperative De- It also said that they should not enter
ing regulator said in a statement.
velopment Bank Limited, Aizawl (the into any compromise or arrangement
bank) was also penalised of Rs. 20,000 The central bank said that investiga- and sell, transfer or otherwise dispose
on for non-compliance with specific tion into the bank based on its finan- of any of its properties or assets except
directions issued by the apex bank un- cial position as on March 31, 2019, as notified in the RBI direction, the
der Supervisory Action Framework revealed that the bank had not put in release added.

14 | 2023 | SEPTEMBER | BANKING FINANCE