The Reserve Bank of India (RBI) has taken major action against five banks for violating the rules. This list includes two banks from Karnataka, while the rest are located in Tamil Nadu, Maharashtra, and Jammu and Kashmir. RBI gave this information on Thursday and has also issued a notification related to it. A day earlier, monetary fines were also imposed on 5 cooperative banks of Maharashtra. So, which rules were violated by these banks, and what will be their effect on the customers? Let’s know in detail.
RBI’s wrath fell on the banks of Karnataka
Vishwa Kalyan Sahakar Bank Niyamathi, Hubli, Karnataka has been fined ₹ 50,000. At the same time, Hari Hareshwar Urban Co-operative Bank Limited has also been fined ₹ 50,000. Both the banks failed to submit the statutory returns to RBI within the stipulated time. This negligence cost the banks dearly, and the RBI took immediate action.
From loan to KYC, there was a mess
Tamil Nadu-based Nicholson Co-operative Town Bank Limited has been fined ₹1.50 lakh. This bank had sanctioned loans related to directors. Apart from this, it also failed to upload the KYC records of customers to the Central KYC Record Registry within the stipulated time limit. This was a direct violation of the rules, on which the RBI took a tough stand.
Varana Sahakari Bank Limited, located in Varananagar, Maharashtra has been fined ₹2 lakh. This bank failed to transfer the eligible unclaimed amount to the Deposit Education and Awareness Fund within the stipulated time. This was a neglect of the interests of the customers, which the RBI took seriously.
The Jammu Central Co-operative Bank Limited, located in Jammu and Kashmir, has been fined ₹1 lakh. This bank had accepted new deposits in savings bank accounts in violation of the special instructions issued by the RBI. This was a disregard of the clear instructions of the RBI.
This action will not have any effect on customers
However, RBI has clarified that this action will not have any effect on the transactions between customers and banks. Customers will be able to use banking services as before. This fine has been imposed only for the violation of rules by the banks, so that such mistakes can be avoided in future and discipline is maintained in the banking system.