RBI imposed monetary penalty on these two banks based in Gujarat and Pune

 RBI imposed monetary penalty on these two banks based in Gujarat and Pune

Both the banks were served show cause notices and considering the bank's reply, RBI came to the conclusion that the allegations against the banks were substantiated.

The Reserve Bank of India (RBI) on Monday said it has imposed monetary penalty of ₹4 lakh and ₹2 lakh on Rajgurunagar Sahakari Bank Ltd and Sahakari Bank of Rajkot.

The Reserve Bank of India (RBI) on Monday said it has imposed monetary penalty on Pune-based Rajgurunagar Sahakari Bank Ltd as well as Gujarat's Sahakari Bank of Rajkot.

Raj Rajgurunagar Sahakari Bank Limited was fined ₹4 lakh for non-compliance with the central bank's directions on interest rates and deposits. While the Co-operative Bank of Rajkot was fined ₹ 2 lakh for non-compliance with the rules related to awareness schemes.


Ltd. and Co-Operative Bank of Rajkot

The Reserve Bank of India (RBI) on Monday said it has imposed monetary penalty on Pune-based Rajgurunagar Sahakari Bank Ltd as well as Gujarat's Sahakari Bank of Rajkot.

Raj Rajgurunagar Sahakari Bank Limited was fined ₹4 lakh for non-compliance with the central bank's directions on interest rates and deposits. While the Co-operative Bank of Rajkot was fined ₹ 2 lakh for non-compliance with the rules related to awareness schemes.


The inspection report of Raj Rajgurunagar Sahakari Bank had revealed that while making payments to the claimants, the bank failed to pay interest on the balances in the current accounts of the deceased individual depositors/sole proprietorship businesses.

RBI issued a notice to the bank, advising it to show cause why penalty should not be imposed for failure to comply with its directions. After reviewing the bank's written response to the show-cause notice, the RBI determined that the allegations of non-compliance with its directions were substantiated and warranted imposition of monetary penalty.

In a statement on the matter, RBI said, "This penalty is imposed under the provisions of section 47A(1)(c) read with section 46(4)(i) and section 56, in exercise of the powers vested in the RBI." "In view of the failure of the bank to comply with the aforesaid directions issued by the Banking Regulation Act, 1949, RBI"

"This action is based on deficiencies in regulatory compliance and is not intended to impinge on the validity of any transaction or agreement entered into by the Bank with its customers"

In respect of the Co-operative Bank of Rajkot, the statutory inspection of the financial conduct of the bank by the Reserve Bank of India revealed, inter alia, that the bank had credited the balances lying in certain unclaimed accounts for more than ten years to the depositors. Education and Awareness Fund was not transferred. This resulted in violation of the provisions of the central bank.

A show cause notice was issued to the bank asking why the penalty should not be imposed for non-compliance of the directions issued by the RBI. On consideration of the Bank's response to the notice and oral submissions, RBI came to the conclusion that the above allegation was substantiated and warranted imposition of monetary penalty.

In a statement on the matter, RBI said, "This action is based on deficiencies in regulatory compliance and is not intended to impinge on the validity of any transaction or agreement entered into by the bank with its customer".