RBI fines Ahmedabad-based Bapunagar Mahila Co-op Bank ₹2 lakh for non-compliance
Summary
The RBI found that the bank had breached the prudential inter-bank (counterparty) exposure limit, warranting the imposition of a monetary penalty.
The Reserve Bank of India (RBI) on Thursday (May 16) said it has imposed a monetary penalty of ₹2 lakh on Bapunagar Mahila Co-operative Bank Ltd, Ahmedabad , Gujarat. The central bank has imposed a penalty for non-compliance with RBI directions on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ in an order dated May 8.
“This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949,” the RBI said.
The central bank conducted the statutory inspection of the bank with reference to its financial position as of March 31, 2023. Following this, it issued a notice as to why a penalty should not be imposed on it for its failure to comply with the said directions.
After receiving the bank’s reply to the notice and oral submissions made by it during the personal hearing, the RBI found that the charge of breaching the prudential inter-bank (counterparty) exposure limit was sustained, warranting the imposition of a monetary penalty, as per a release.
The RBI further said, “This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.”
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The Reserve Bank also imposed a monetary penalty of ₹5 lakh on Sutex Co-operative Bank Ltd, Surat, Gujarat, for non-compliance with its directions. It was found to be flouting the directions on ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs) – A Graded Approach’ and ‘Levy of Penal Charges on NonMaintenance of Minimum Balances in Inoperative Accounts.’
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