Curated By: Business Desk
Last Updated: December 09, 2023, 16:02 IST
RBI not too long ago imposed penalties on 4 cooperative banks.
After the Reserve Bank of India (RBI) revoked the working license of the Urban Cooperative Bank, the agricultural Bank needed to stop its operations on December 7.
The Reserve Bank of India (RBI) has imposed fines on 4 banks and revoked the license of Urban Cooperative Bank Limited for not abiding by its guidelines. This financial institution operates in Sitapur, Uttar Pradesh. The RBI has affirmed that this cooperative financial institution has inadequate funds for operations, and there’s no prospect of future earnings. Therefore, the financial institution is being shut down. Following RBI’s motion, Urban Cooperative Bank needed to stop its operations from Thursday, December 7, 2023.
Furthermore, the RBI has additionally directed the Commissioner and Registrar of Uttar Pradesh to take acceptable measures to shut the financial institution. In addition, RBI states that the financial institution has not made full funds to its prospects. Fortunately, nearly all of the financial institution’s prospects will obtain nearly their total deposited quantity again. The Central Bank of India assures that 98.32 per cent of shoppers will obtain their full a reimbursement, and deposits as much as Rs 5 lakh are insured. According to RBI knowledge, 98.32 per cent of the financial institution’s prospects have deposits of Rs 5 lakh or much less, thus, reaffirming that they may certainly obtain their funds.
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The RBI has imposed fines on 4 cooperative banks, together with Patan Cooperative Bank, District Central Bank, Rajarshi Shahu Cooperative Bank, and Primary Teachers’ Cooperative Bank. Among these, three banks every face a high quality of Rs 1 lakh, and one other financial institution has been fined Rs 10,000. The penalties have been imposed by the severity of the malpractices adopted in these banks.
According to RBI notification, the explanations for imposing fines on the above-talked about banks are:
The District Central Bank was not following the rules of the National Bank for Agriculture and Rural Development (NABARD).
Patan Cooperative Bank uncared for the KYC guidelines, whereas the Primary Teachers’ Cooperative Bank supplied gold loans towards RBI guidelines.
Whilst, Rajarshi Shahu Cooperative Bank was not adhering to the minimal stability laws.
