RBI Levies Monetary Fines On Five Cooperative Banks

The Reserve Bank of India (RBI) made an announcement on 30 October, stating that it has imposed monetary penalties on five cooperative banks for various rule violations. The penalised banks in question are Uma Co-operative Bank, Birbhum District Central Co-operative Bank, Mizoram Co-operative Apex Bank, Shihori Nagarik Sahakari Bank and Pij People’s Co-operative Bank.

Each of these banks faced distinct penalties as follows: Mizoram Co-operative Apex Bank and Pij People’s Co-operative Bank were both fined Rs 2 lakh each. Birbhum District Central Co-operative Bank received a penalty of Rs 1.10 lakh, while Shihori Nagarik Sahakari Bank was penalised with Rs 1 lakh. Uma Co-operative Bank incurred the most substantial penalty, amounting to Rs 7 lakh.

The specific reasons for these penalties varied. Uma Co-operative Bank was penalised for breaching the prescribed inter-bank counterparty exposure limit and exceeding the inter-bank gross exposure limit, as outlined in the official release by the RBI. Mizoram Co-operative Apex Bank faced penalties because its total exposure to housing finance surpassed the prescribed limit. On the other hand, Pij People’s Co-operative Bank was penalised for its failure to conduct periodic reviews of risk categorisation of accounts.