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RBI imposes fine of Rs 15 lakh on 2 co-operative banks for non-compliance

In both cases, the penalty has been imposed based on deficiencies in regulatory compliance

Topics
RBI | Co-operative Bank | Non-compliance

Press Trust of India  |  Mumbai 

RBI

The on Wednesday said it has imposed penalty totalling Rs 15 lakh on two co-operative banks, including Millath Co-operative Bank, Davangere (Karnataka) for with directions issued by it.

A penalty of Rs 10 lakh has been imposed on Millath for "non-adherence/violation of all inclusive directions and other directions imposed on the bank", the Reserve Bank of India (RBI) said in a statement.

In another statement, it said a monetary penalty of Rs 5 lakh has been imposed on The Thiruvaikuntam Co-operative Urban Bank Limited, Thoothukudi (Tamil Nadu) for contravention of the directions issued by on prohibition of loans and advances to directors.

In both cases, the penalty has been imposed based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the with their customers, it said.

said the inspection report of Millath Co-operative Bank, based on its financial position as on March 31, 2019, revealed inter alia, violation/with the directions on permitting of withdrawals in excess of the stipulated amount and sanctioning of fresh loans and advances in violation of directions issued under Supervisory Action Framework (SAF).

Meanwhile, the inspection report of The Thiruvaikuntam Co-Operative Urban Bank, based on its financial position as on March 31, 2019, revealed that the bank had sanctioned loans to its directors in contravention with the directions issued by RBI in this regard.

Notices were issued to both the After considering their replies and oral submissions made during the personal hearing, RBI came to the conclusion that the charges of with directions were substantiated and warranted imposition of monetary penalty.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Thu, November 05 2020. 00:00 IST
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