The Reserve Bank of India (RBI) has taken action against five banks, imposing a total fine of 84 lakh rupees for various regulatory violations. This move underscores the central bank’s commitment to maintaining strict compliance with banking regulations.

Highest Penalty on NKGSB Cooperative Bank Limited

The NKGSB Cooperative Bank Limited faced the heaviest penalty, with a fine of 50 lakh rupees. The RBI’s decision, dated January 12, was in response to the bank’s failure to comply with Know Your Customer (KYC) norms.

Penalties on Other Banks

  1. The Patdi Nagarik Sahakari Bank Limited: Fined 10 lakh rupees for granting loans to a director’s relative and accepting non-interest-bearing deposits apart from current account deposits.
  2. New India Co-operative Bank Limited: Faced a 15 lakh rupee penalty, issued on January 17, for violating the stipulated limits on donations.
  3. Mehsana Nagarik Sahakari Bank Limited: Penalized with a 7 lakh rupee fine for accepting loans where a bank director’s relative was a guarantor and failing to transfer eligible amounts to the Depositor Education and Awareness Fund.
  4. The Idar Nagarik Sahakari Bank Limited: The RBI imposed a 2 lakh rupee fine for violating prudent inter-bank exposure limits and counterparty risk limits.

Nature of Violations and RBI’s Regulatory Measures

The RBI’s action reflects its stringent approach to ensuring adherence to banking norms and regulations. The various penalties highlight issues ranging from non-compliance with KYC norms to violations of prudent banking practices, such as inter-bank exposure and counterparty risk limits.

RBI’s Continued Vigilance

This latest round of penalties is part of the RBI’s ongoing efforts to enforce regulatory compliance and safeguard the integrity of the banking sector. These measures are crucial in maintaining trust and stability in the financial system.

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