Page 17 - Banking Finance April 2022

CO-OPERATIVE BANK NEWS

Co-Operative Bank

News

RBI imposes a penalty on action or agreement entered into by On liquidation, every depositor would
the banks with their respective cus- be entitled to receive deposit insurance
3 cooperative banks tomers. claim amount of their deposits up to

The Reserve Bank of India has imposed Rs.5 lakh from the Deposit Insurance
a penalty on three cooperative banks, RBI cancels license of and Credit Guarantee Corporation
including Nagrik Sahakari Bank (DICGC), the RBI said.
Maryadit, Raipur, Chhattisgarh, for People's Co-operative
According to the data submitted by
deficiencies in regulatory compliances.
Bank in Uttar Pradesh the bank, more than 99 % of the de-
A fine of Rs 4.50 lakh has been imposed The Reserve Bank of India has can- positors are entitled to receive the full
on Nagrik Sahakari Bank Maryadit for celed the license of People's Co-opera- amount of their deposits from DICGC,
contravention of the directions issued
tive Bank Limited in Uttar Pradesh. the regulator added.
by the RBI to urban cooperative banks
on exposure norms and statutory/other The bank ceases to carry on banking
restrictions-UCBs and Know Your Cus- business, with effect from the close of RBI exempts UCBs' invest-
tomer (KYC), the central bank said. business on March 21, 2022, the RBI ment in Umbrella Organis-
said. The license was canceled as the
The Reserve Bank has imposed a pen- bank didn't have adequate capital and ation from non-SLR hold-
alty of Rs 1 lakh on Jila Sahakari earning prospects, it added.
Kendriya Bank Maryadit, Panna for ing limits
contravention of certain provisions of "The Commissioner for Cooperation RBI has exempted investments made
the Banking Regulation Act, 1949, the and Registrar of Cooperative Societies, by Urban Co-operative Banks (UCBs)
Depositor Education and Awareness Uttar Pradesh has also been requested for subscribing to the capital of the
Fund Scheme, 2014, and KYC. to issue an order for winding up the Umbrella Organisation (UO) from the
bank and appoint a liquidator for the
Also, a penalty of Rs 25,000 was im- bank," the RBI said. limits imposed on holding of non-Statu-
posed on Jila Sahakari Kendriya Bank tory Liquidity Ratio (non-SLR) securities.
Maryadit, Satna for non-compliance Its financial position wouldn't allow the The move is expected to encourage
with the provisions of the Banking bank to pay the depositors in full and UCBs to subscribe to the capital of UO
Regulation Act, 1949 and the Deposi- public interest would be affected if it and acquire its membership. The UO
tor Education and Awareness Fund was allowed to carry on, the regulator will be a non-banking finance company
Scheme, 2014. said. (NBFC).
The RBI, however, added the penalties People's Co-operative Bank was prohib- According to the RBI's 2009 circular on
are based on deficiencies in regulatory ited from conducting the business of 'Investments in Non-SLR securities by
compliance and is not intended to pro- "banking", which includes acceptance Primary (Urban) Co-operative Banks',
nounce upon the validity of any trans- and repayment of deposits. non-SLR investments will be limited to

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