RBI Penalises Pudukkottai Co-operative Town Bank For Violating Guidelines

The Reserve Bank of India (RBI) has imposed a penalty of Rs 25,000 on Pudukkottai Co-operative Town Bank for failing to comply with the directives issued on 'Board of Directors - UCBs.' In a notice released on Monday, the RBI stated, "This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949 (AACS)." The cooperative bank violated guidelines by extending loans to its directors, prompting the RBI to issue a show-cause notice, and after reviewing the bank's response, the penalty was deemed necessary.

Additionally, two other financial institutions faced penalties for non-compliance with regulations, according to RBI notices issued on Monday. Kolkata-based Sappers Finance and Consultancy received a fine of Rs 1.50 lakh for violating rules related to the acquisition/transfer of control of NBFC. Another notice announced a penalty of Rs 2 lakh for Sangli Sahakari Bank, Mumbai, for violating rules outlined by the central bank regarding the 'Board of Directors-UCBs.'

"The Reserve Bank of India (RBI), by an order dated 2 November 2023, imposed a monetary penalty of Rs 1.50 lakh (Rupees One lakh fifty thousand only) on Sappers Finance and Consultancy, Kolkata (the company) for non-compliance with the directions issued by RBI on (i) ‘Requirement for obtaining prior approval of RBI in cases of acquisition/transfer of control of Non-Banking Financial Companies (NBFCs)’; and (ii) ‘Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016," read an RBI notice.

"The Reserve Bank of India (RBI), by an order dated 15 September 2023, has imposed a monetary penalty of Rs 2 lakh (Rupees Two lakh only) on Sangli Sahakari Bank, Mumbai (the bank) for non-compliance with the directions issued by RBI on ‘Board of Directors-UCBs," stated RBI in its notice issued on Monday.