Gujarat : RBI imposes financial penalties on 3 co-operative banks

Ahmedabad : The Reserve Bank of India (RBI) has imposed financial penalties on several cooperative banks in Gujarat for failing to comply with regulatory directives. The affected banks include The Mehmadabad Urban People’s Co-operative Bank Ltd. in Mehmadabad, The Jambusar People’s Co-operative Bank Ltd. in Bharuch, and The Rander People’s Co-operative Bank Ltd. in Surat.

The RBI issued orders detailing the penalties imposed on each of these banks. The specifics of the fines are as follows:

In one case, by an order dated October 28, 2024, the RBI imposed a monetary penalty of ₹60,000 (Rupees Sixty Thousand only) on Mehmadabad Urban People’s Co-operative Bank Ltd., Mehmadabad, Dist. Kheda, Gujarat, for non-compliance with certain RBI directions on ‘Membership of Credit Information Companies (CICs) by Co-operative Banks’ and ‘Know Your Customer (KYC).’ The bank failed to: (i) submit data to three CICs and submitted incomplete data to one CIC, and (ii) conduct periodic reviews of account risk categorization at least every six months.

In the second case, by an order dated October 28, 2024, the RBI imposed a monetary penalty of ₹1.50 lakh (Rupees One Lakh Fifty Thousand only) on The Rander People’s Co-operative Bank Ltd., Surat, Gujarat, for contravening provisions of section 26A read with section 56 of the Banking Regulation Act, 1949 (BR Act), and non-compliance with RBI directions on ‘Know Your Customer (KYC).’ The bank failed to: (i) transfer eligible amounts to the Depositor Education and Awareness Fund within the prescribed period, (ii) conduct risk-based KYC updates for its customers, and (iii) implement a system for periodic reviews of account risk categorization at least every six months.

In the third case, by an order dated October 28, 2024, the RBI imposed a monetary penalty of ₹10,000 (Rupees Ten Thousand only) on The Jambusar People’s Co-operative Bank Ltd., Bharuch, Gujarat, for non-compliance with RBI directions on ‘Membership of Credit Information Companies (CICs) by Co-operative Banks.’ The bank failed to submit data to any CICs.

These actions resulted from statutory inspections conducted by the RBI, assessing the financial positions of these banks as of March 31, 2023.