RBI penalises Bihar State Co-op Bank Rs 60.20 lakh for various shortcomings

Mumbai, June 12, 2023

The Reserve Bank on Monday imposed a penalty of Rs 60.20 lakh on The Bihar State Co-operative Bank Limited, Patna, for a slew of shortcomings and violations.

The RBI said a statutory inspection of the Patna-based bank by Nabard after FY20 had revealed that it failed to put in robust software for identifying and reporting suspicious transactions and submit statutory returns within prescribed timelines.

It also failed to submit off-site surveillance system returns within prescribed timelines, submit data to all the four credit information companies and also constitute a customer service committee of the board, among other things.

A notice was issued to the bank, and the fine has been imposed after going through its reply, as per an official statement from the central bank.

The RBI also announced a monetary penalty of Rs 6 lakh on Jowai Cooperative Urban Bank Limited, Meghalaya for deficiencies in regulatory compliance.

The bank was found to have breached inter-bank (gross) exposure limits and failed to carry out periodic review of risk categorisation of its accounts in an inspection report for FY22, the RBI said, following which a notice was issued and the monetary penalty was decided after going through the reply.

Similarly, Telangana State Cooperative Apex Bank Limited, Hyderabad has been penalized Rs 2 lakh for failing to transfer eligible amounts to the Depositor Education and Awareness Fund within the prescribed period in FY20, the RBI said.

The central bank also imposed a monetary penalty of Rs 10 lakh on The Co-operative Bank of Rajkot Ltd, Rajkot (Gujarat) for contravention of directions on 'Reporting of unauthorised transactions by customers to banks', 'Names as Appearing in the Certificate of Registration and the Licence - Use of - Primary (Urban) Co-operative Banks (UCBs)' and 'Frauds in UCBs: Changes in Monitoring and Reporting mechanism, as per the statement.

It also said that Chennai-based Equitas Holdings and the city-based Mukand Global Finance have surrendered their Non-banking finance company licenses granted to them earlier.

[Press Trust of India]