Reserve Bank of India imposes Rs 11 lakh penalty on 2 co-op banks

The RBI has imposed penalty totalling Rs 11 lakh on Bijnor Urban Co-operative Bank Limited, Bijnor and National Urban Co-operative Bank Limited, New Delhi for contravention of certain norms.

A penalty of Rs 6 lakh has been imposed on the Bijnor Urban Co-operative Bank Limited, and Rs 5 lakh on the National Urban Co-operative Bank Limited.

The inspection report of the Bijnor Urban Co-operative Bank based on its financial position as on March 31, 2019, revealed, inter alia, that the bank failed to adhere to the provisions related to prohibition on director related loans and issue of performance guarantee, the RBI said.

In another statement, it said the inspection report of the National Urban Co-operative Bank based on its financial position as on March 31, 2019, revealed, inter alia, non-adherence/violation of specific directions issued to the bank by RBI under Supervisory Action Framework (SAF).

RBI further said penalities have been imposed based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered by the two lenders with their customers.