Page 18 - Banking Finance December 2022

Co-Operative Bank

News

Are RRBs serving the ob- RRBs, on the other hand, has shrunk The monetary penalties slapped on
from 13 per cent to 11 per cent dur- these banks range from Rs 25,000 to
jective
ing this period. Rs 3.1 lakh, RBI said in nine standalone
The Regional Rural Banks (RRBs), set statements.
It raises a serious question as to how
up in the mid-1970s to provide finan-
far the RRB's are relevant in current The RBI said this action is based on de-
cial services to agricultural workers
time. Similarly performance of Coop- ficiencies in regulatory compliance and
and labourers, have been struggling
erative Banks also has not been upto is not intended to pronounce upon the
right from the beginning. Several of
the mark. The NPA has been increas- validity of any transaction or agree-
them are now facing an existential cri-
ing and banks also not performing op- ment entered into by the banks with
sis due to dwindling business and soar-
timally. RBI needs to give a serious its customers.
ing bad assets.
thought on operation of RRB's and
After considering the banks' reply to
Bids made from time to time to prop Cooperative Banks.
the notice, the RBI came to the con-
them up through various means of
clusion that the aforesaid charge was
handholding by the Union and state RBI imposes penalties on
substantiated and warranted imposi-
governments and the sponsoring com- tion of monetary penalty.
nine cooperative banks for
mercial banks, which jointly own the
RRBs, have failed to produce the de- violating compliances
Man arrested in Chennai
sired results. Consequently, many of The Reserve Bank of India has imposed
for opening 'bank' with
them have either collapsed or got monetary penalties on nine coopera-
merged with their parent banks. tive banks on account of various con- forged RBI permission
traventions or non compliances of laid
While the number of RRBs has nearly Police in Chennai have arrested a per-
down guidelines.
halved - from 82 to 43 - their non-per- son for forging RBI permission certifi-
forming assets have more than These banks are The Berhampur Coop- cate for running a bank in different
doubled - from 2.05 per cent to 4.68 erative Urban Bank, The Kendrapara parts of Tamil Nadu. Action against the
per cent - in the past one decade. This, Urban Co-operative Bank , The accused, identified as Chandrabose,
notably, has happened at a time when Jamshedpur Urban Cooperative Bank, was taken based on a complaint from
the overall business of the rural finan- Krishna Mercantile Co-operative Bank, the Reserve Bank of India (RBI), PTI
cial institutions has generally been look- Renuka Nagarik Sahakari Bank reported. Police said there was no per-
ing up as indicated by the surge in the Maryadit, Jila Sahakari Kendriya Bank mission from RBI for Chandrabose to
share of commercial banks in agricul- Maryadit, Osmanabad Janata Sahakari run the bank and he had forged a per-
tural loans from 65 per cent in 2010- Bank, The Santrampur Urban Co-op- mission letter.
11 to 76 per cent in 2021-22. The vol- erative Bank, and The Nawanagar Co- Chandrabose reportedly operated the
ume of the credit disbursed by the operative Bank. Rural and Agriculture Farmers' Coop-

18 | 2022 | DECEMBER | BANKING FINANCE