The Reserve Bank of India (RBI) fined two cooperative banks a total of ₹3.50 lakh for failing to meet regulatory requirements. The Manipur State Cooperative Bank Ltd. received the largest fine of ₹2 lakh, while the Urban Cooperative Bank Ltd. in Cuttack was penalized ₹1.50 lakh.
The Manipur State Cooperative Bank was penalized for breaching provisions of Section 9 of the Banking Regulation Act and failing to comply with the Credit Information Companies (CIC) Regulation Act. The RBI’s inspection revealed the bank’s failure to dispose of certain non-banking assets within the required timeframe and its negligence in reporting customer credit information to four CICs.
Urban Cooperative Bank was fined for not adhering to RBI directives on know-your-customer (KYC) processes, exposure limits, and other regulations specific to urban cooperative banks. The RBI found that the bank did not update customer KYC details or review risk categories as needed and exceeded the permissible interbank exposure limit.
The RBI stated that these penalties address issues of regulatory compliance and do not impact the validity of any transactions or agreements made by the banks with their customers.
Additionally, the RBI extended restrictions on Ajantha Urban Co-operative Bank Maryadit, Aurangabad, until February 29, 2024.
