Page 17 - BANKING FINANCE OCTOBER 2021

CO-OPERATIVE BANK NEWS

RBI with an objective of financial inclu- tioned the quantum of money involved lations of Section 23 read with Section 56
sion for the un-served and underserved in the frauds. The RBI's report said of the Banking Regulation Act, 1949 have
sections including small business units, scheduled commercial banks had re- proved the above allegations.
small and marginal farmers, micro and ported 7,363 frauds involving Rs
small industries and unorganised enti- 1,38,422 crore. DICGC to pay upto Rs 5
ties," Bose added.
Similarly, in her reply, Sitharaman stated lakh to depositors of 21
In July last year, WhatsApp had an- UCBs had reported 323 cases of fraud
nounced a pilot project with HDFC while the district central cooperative insured co-op banks
Pensions and their tech partner pinBox banks and the state cooperative banks Deposit Insurance and Credit Guaran-
to enable people to sign up for micro had reported 482 cases. However, the tee Corporation (DICGC) will pay the
pensions. Bose said the process has reply has been silent about the money depositors of 21 insured cooperative
now been made more simple and is involved, Anaskar said. banks, including Punjab &
powered by the integration of both Maharashtra Co-Op Bank (PBC Bank)
Aadhaar and UPI systems, enabling Cooperative bank fined by and City Co-operative Bank, upto Rs 5
people to fund micro pensions for RBI lakh in 90 days.
themselves or for others. These banks have been placed under
The Reserve Bank of India (RBI) has
WhatsApp had gone live with its UPI imposed a fine of Rs 11 lakh on The direction with restrictions on with-
payment service in November last Jammu and Kashmir State Co-operative drawal of deposits. Out of the 21
year, after receiving a nod from the Bank Limited, Srinagar on September banks, 11 are from Maharashtra, 5
National Payments Corporation of 23, 2021, for disobeying Section 23 read from Karnataka and one each from
India(NPCI) nearly two years after its with Section 56 of the Banking Regula- Uttran Pradesh, Kerala, Rajasthan,
initial pilot. However, the service is still tion Act, 1949. The Reserve Bank says Madhya Pradesh and Punjab.
restricted to 20 million users and cur-
that the penalty is imposed in exercise In June, the Reserve Bank of India gave
rently has less than a 1% volume share
of the powers conferred on RBI under "in-principle" approval to Centrum Fi-
in the market. the provisions of Section 47A(1) (C) read nancial Services Ltd (CFSL) to set up a
with Section 46 (4) (i) Section 56 of the small finance bank, which will take over
Protest by Urban coopera- Banking Regulation Act, 1949. the beleaguered Punjab and
tive banks This action is based on deficiencies in Maharashtra Cooperative Bank (PMC
Urban cooperative banks (UCB) have regulatory compliance, which is not Bank).
strongly protested against what they intended to question the validity of any DICGC in a statement said only those
called a "concerted effort" to defame transactions or agreements made by depositors who have given willingness
them by the Union government. the bank with its customers. The statu- to the insured banks would get money.
Vidyadhar Anaskar, president of the tory inspection report conducted by The depositors should submit the dec-
Maharashtra State Urban Cooperative the NABARD on 31st March 2019 in laration of willingness and also update
Banks Federation, said this effort was the context of its economic condition any other documents/information to
to scare off the depositors of the UCBs, has revealed that the bank has violated help banks to include their claims in list
seemingly with the indirect support of Section 23 with Section 56 of the Bank- by October 15, 2021.
the Reserve Bank of India (RBI). ing Regulation Act, 1949, as the bank
These banks shall submit a claim list by
has opened branches without seeking
Anaskar pointed to the annual report October 15, 2021 and update the posi-
prior approval of the RBI.
of the RBI as well as the reply given by tion as on November 29, 2021 (with
the Union Finance Minister Nirmala On the basis of the said, a notice has principal and interest). This will enable
Sitharaman to a question asked by been issued to the bank asking them to DICGC to settle the claim and discharge
Rajya Sabha member M Shanmugam. give reasons as to why they should not its insurance liability in full as per norms.
RBI in its annual report 2020-21 men- be punished for violating the said direc- DICGC will do the verification and settle-
tioned the number of frauds that had tions. After considering the bank's reply, ment of the claims within 45 days (No-
happened in UCBs but had not men- RBI has come to the conclusion that vio- vember 29, 2021). T

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