Page 20 - BANKING FINANCE APRIL 2024

RBI imposes Rs 59.90 lakh Additionally, a fine of Rs 50,000 was the specified time despite specific di-
imposed on Chikkamagaluru District rection issued by RBI.
penalty on Nashik's Cooperative Central Bank, Karnataka,
Janalaxmi Cooperative for delays in reporting frauds to the Amit Shah launches

Bank National Bank for Agriculture and Ru- NUCFDC, sets target to es-
ral Development.
The Reserve Bank of India (RBI) has tablish one urban coop-
imposed a penalty of Rs 59.90 lakh on RBI imposes monetary
Janalaxmi Cooperative Bank, based in erative bank in each town
Nashik, for not complying with regula- penalty on five co-opera- Cooperation Minister Amit Shah
tions. The RBI discovered that the bank tive banks for rule viola- launched the National Urban Coopera-
did not form a board of management tive Finance and Development Corpo-
within the extended timeframe pro- tions ration (NUCFDC) and asked the um-
vided by the RBI. Additionally, the bank RBI said it has imposed monetary pen- brella body to set up one urban coop-
granted credit facilities to its nominal alty on five co-operative banks viz., erative bank in each town.
members exceeding the prescribed Mathura Jilla Sahkari Bank, Solapur
limit and opened/renewed term de- Janata Sahakari Bank, The Janalaxmi NUCFDC has received the RBI approval
posits at interest rates higher than Co-operative Bank, Chikkamagaluru to function as a non-banking finance
those offered by the State Bank of In- District Cooperative Central Bank, and company and a self-regulatory
dia for the same duration. The Dindigul Urban Co-operative Bank, organisation for the urban cooperative
for rule violations. banking sector.
The bank received a show cause notice
and, following that, the penalty was The central bank imposed Rs 1 lakh After the launch, Shah said, "After 20
imposed under the sections of the penalty on Mathura Jilla Sahkari Bank, years, NUCFDC has been established.
Banking Regulation Act, according to Rs 59.90 lakh on The Janalaxmi Co-op- This is the need of the hour. I am
an official statement. erative Bank, Rs 28.30 lakh on Solapur happy the RBI has given approval for
Janata Sahakari Bank, Rs 25,000 on The this." Urban cooperative banks have
The central bank has imposed a penalty been operating in India for a long time,
Dindigul Urban Co-operative Bank, and
of Rs 28.30 lakh on Solapur Janata but could not grow rapidly even
Sahakari Bank for appointing a board of Rs 50,000 on Chikkamagaluru District though they can play a key role in the
management member who did not Cooperative Central Bank, release said.
country's economic growth, he said.
meet the 'fit and proper' criteria. The The penalty on Solapur Janata
bank also failed to reconstitute the Sahakari Bank as the bank had ap- The main objective of NUCFDC should
panel within the specified time and con- pointed a member on its Board of be to help urban cooperative banks
travened the Supervisory Action Frame- Management (BoM), who did not sat- adhere to the Banking Regulations Act
work by sanctioning fresh loans with risk isfy the 'Fit and Proper' criteria and it and bring professionalism in their
weights exceeding 100 per cent in FY22. did not reconstitute the BoM within work, the minister said.

18 | 2024 | APRIL | BANKING FINANCE