RBI New Order: Four banks are fined and another bank license is revoked by the RBI

 RBI New Order: Four banks are fined and another bank license is revoked by the RBI

RBI New Order: Four banks are fined and another bank license is revoked by the RBI

Once again, the RBI has taken action against banks. Four banks received fines for breaking the requirements, and a UP cooperative's license was revoked.

The Reserve Bank of India (RBI) has imposed stringent measures on five cooperative banks for their rule violations. Of them, one bank in Uttar Pradesh had its license revoked. Four banks have also been hit with fines. The Urban Cooperative Bank Limited license in Sitapur, Uttar Pradesh, has been revoked by RBI. The RBI said that there was no chance of the bank's profitability and that there was not enough cash left over for operations.

Penalties for four cooperative banks

Four cooperative banks have also been hit with penalties by the RBI. Among them, the District Central Bank, Patan Cooperative Bank, Rajarshi Shahu Cooperative Bank, and Primary Teachers Cooperative Bank have all been hit with financial penalties. Of them, three have been fined Rs 1 lakh each, while one cooperative bank has been fined Rs 10,000. Rajarshi, according to the central bank, was not keeping his savings account balance below the required minimum. In violation of the regulations, Teachers Co-operative Bank had approved gold loans. Both Patan Cooperative and the District Central Bank disregarded NABARD regulations and broke KYC regulations.

Why was Urban Cooperative Bank's license revoked?

According to the RBI, Urban Cooperative Bank will need to cease operations on December 7th. Additionally, orders to dissolve the bank and appoint a liquidator have been obtained from the Uttar Pradesh Commissioner and Registrar. The RBI claims that the bank lacks enough capital and earning potential. As a result, the bank's management is not in the best interests of its clients. The bank will be unable to pay its clients in full.

There will be a lot of financial losses.

The amount placed in the account up to Rs 5 lakh would be insured after the revocation of Urban Cooperative Bank's license. This also involves interest. Over this amount, there will be no return. As per the statistics obtained by the bank, a mere 98.32 percent of its clientele would be eligible to get their whole amount.