RBI Imposes Fines on 5 Banks for Non-Compliance

The Reserve Bank of India (RBI) has taken strict measures against five cooperative banks for violating banking regulations. Three of these banks are in Tamil Nadu, one in Gujarat, and one in Maharashtra. Additionally, restrictions have been placed on one more bank, impacting its customers.

Banks Penalized for KYC and Loan Violations

• The Tiruppur Co-operative Urban Bank Limited (Tamil Nadu) – Fined ₹1.5 lakh for failing to comply with prudential banking limits and KYC guidelines.
• The Ramanathapuram Co-operative Urban Bank Limited (Tamil Nadu) – Fined ₹50,000 for not updating customer KYC records.
• The Salem Urban Co-operative Bank Limited (Tamil Nadu) – Fined ₹1.75 lakh for sanctioning loans to directors and exceeding the secured advance limit.
• The Mumbai Municipal Corporation Education Department Sahakari Bank Limited (Maharashtra) – Fined ₹50,000 for failing to conduct timely risk classification reviews.
• Sulaimani Co-operative Bank Limited (Gujarat) – Fined ₹2 lakh for violating inter-bank exposure limits and improperly opening savings accounts.

Restrictions Imposed on New India Co-operative Bank

RBI has placed restrictions on The New India Co-operative Bank Ltd., preventing it from granting loans, accepting new deposits, or making significant financial transactions without prior RBI approval. The bank can, however, pay essential expenses like salaries and electricity bills. These restrictions will remain for six months, pending further review.

Ensuring Customer Protection

Eligible depositors of the restricted bank can claim up to ₹5 lakh under deposit insurance. RBI's actions highlight its commitment to maintaining financial discipline and protecting the interests of customers.