4 Bank Penalty: RBI imposed a heavy fine on these 4 banks, ignoring the rules proved costly
RBI has taken a big step against many banks. Penalty has been imposed for non-compliance of rules. The notification has been issued on 7th August. Let us know why the central bank took this step and whether it will affect the customers or not?
RBI Action: In August, once again the Reserve Bank of India (RBI) has taken action. Monetary fines have been imposed on four banks simultaneously. All the banks are located in different states of the country. On finding negligence in the rules, the central bank has taken this step under various provisions of the Banking Regulation Act. RBI has informed about this action on 7 August.
This list includes Andaman and Nicobar State Co-operative Bank Limited, The Katihar District Central Co-operative Bank Limited (Bihar), The Chansma Nagrik Sahakari Bank Limited (Patan Gujarat) and The Raiganj Central Co-operative Bank Limited (West Bengal). Some have violated the rules related to loans and some have violated the rules related to KYC.
In March 2024, these banks were inspected by NABARD/RBI. During this, it was found that some banks were not complying with the guidelines properly. After this, notices were issued to all, they were asked for the reason. Based on the reply and the presentations given, a decision was taken to impose a penalty. However, this will not affect the transactions or agreements between the customers and the bank.
Raiganj Central Co-operative Bank Limited
The Raiganj Central Co-operative Bank Limited failed to upload the KYC records of customers to the Central KYC Record Registry within the stipulated time limit. Apart from this, instead of a unique customer identification code for each customer, multiple customer identification codes were allotted to some individual customers. Therefore, RBI has imposed a fine of Rs 3.10 lakh on the bank.
Andaman & Nicobar State Co-operative Bank Limited
Andaman & Nicobar State Co-operative Bank Limited failed to transfer the eligible unclaimed amount to the Depositor Education and Awareness Fund within the stipulated time. Apart from this, it also failed to review the periodicity of risk classification of accounts, which should have been done at least once in 6 months. Therefore, a fine of Rs 16 lakh has been imposed on it.
The Katihar District Central Co-operative Bank Limited
The Katihar District Central Co-operative Bank Limited sanctioned loans related to directors. Apart from this, it also failed to submit the credit information of its customers to two credit information companies. Therefore, a fine of Rs 3.03 lakh has been imposed on the bank.
The Chansma Nagarik Sahakari Bank Limited
RBI has imposed a fine of Rs 1 lakh on The Chansma Nagarik Sahakari Bank Limited. The bank failed to provide 24*7 access to customers to report unauthorized electronic banking transactions through multiple channels. It also failed to enable its customers to respond promptly by “Reply” on SMS to inform objection to unauthorized electronic banking transactions.
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