Reserve Bank of India has shown strictness (RBI Action) against two cooperative banks. Penalty has been imposed for non-compliance of guidelines to KYC and Loan and Advance. RBI will release this information on its official website on June 8. But it is given. This step has been taken under various provisions of the Banking Regulation Act 1949.
A fine of Rs 50,000 has been imposed on Amravati Merchants Cooperative Bank Limited, located in Amravati, Maharashtra. A penalty of Rs 3 lakh has been imposed on The Karnal Central Co-operative Bank Limited, located in Haryana. A statutory inspection was conducted by NABARD/RBI with respect to the financial position of the bank as on March 31, 2025. During this period, shortcomings in following the guidelines were revealed.
Based on the investigation report, RBI issued notices to both the banks and sought clarification. Based on the response received and the presentations given during the personal hearing, the allegations were proved to be true. After this the decision to impose penalty was taken.
Amravati Merchants Co-operative Bank Limited sanctioned loans to directors. The Karnal Central Co-operative Bank Limited failed to put in place a system to periodically review the risk classification of accounts. Apart from this, it was also not able to implement robust software for effective identification and reporting of transactions.
The Reserve Bank of India regulates all the banks and non-banking financial companies across the country. Whenever a company or bank violates the rules, RBI takes action. However, the fine will not affect customers. This has been confirmed by the Central Bank itself. “This action is based on regulatory lapses. It is not intended to affect the validity of any transaction or agreement between the bank and the customer,” RBI said.
