RBI New Order: Exciting updates, clients! RBI action against five banks; notice of branch closure issued; check right away

 RBI New Order: Exciting updates, clients! RBI action against five banks; notice of branch closure issued; check right away

New RBI Order: District Central Cooperative Banks (DCCBs) are allowed to liquidate their unproductive branches without the central bank's previous approval, according to a statement released by the Reserve Bank of India (RBI) on Monday.

Five cooperative banks have been penalized by the Central Reserve Bank. These cooperative banks are called Shihori Nagrik Co-operative Bank Limited, Uma Co-operative Bank Limited, Peez People's Co-operative Bank Limited, Mizoram Co-operative Apex Bank Limited, as well as Birbhum District Central Co-operative Bank Limited. These banks have all been charged with breaking regulations. Customers won't be impacted by this, however.

Which bank will incur what penalty?

Uma Co-operative Bank Ltd. has been fined ₹7 lakh by the Reserve Bank for failing to abide by RBI regulations on main (urban) cooperative banks' (UCBs') deposit holding obligations with other banks. The location of this bank is in Gujarat's Vadodara. In addition, Peasant People's Co-operative Bank Limited was hit with a ₹2 lakh fine by the Reserve Bank. This bank has been found culpable for failing to follow the RBI's 2016 KYC Guidelines requirements.

Mizoram Co-operative Apex Bank Ltd., Aizawl was fined ₹2 lakh by the Reserve Bank for failing to follow the guidelines on "Housing Finance" that were sent to state co-operative banks. In a comparable manner Birbhum District Central Co-operative Bank Ltd. has been fined ₹1.10 lakh. Shihori Nagrik Sahakari Bank Ltd. was hit with a ₹1 lakh financial penalty by RBI.

Fixed the criteria for closing DCCB branches

District Central Cooperative Banks (DCCBs) are permitted to liquidate their unproductive branches without the central bank's prior consent, according to a statement from the Reserve Bank. They must, however, get permission from the state's Registrar of Cooperative Societies in order to do this.

In a circular, the Reserve Bank said that the necessary considerations should be kept in mind while making the decision to liquidate underperforming branches, and that the minutes of the DCCB board of directors meeting should be appropriately documented. Before shutting a branch, the bank is required by RBI regulations to notify all current depositors and customers two months in advance by publishing a press statement in one of the area's major newspapers. Nonetheless, the RBI said that DCCB would not be permitted to shut branches if any bank has been subject to restrictions.