New Delhi: The Reserve Bank of India (RBI) on Friday announced that it has imposed monetary penalties on four cooperative banks in Gujarat, amounting to a total of ₹9.5 lakh. Among the penalised banks, two are located in Vadodara, while one each is in Patan and Mehsana districts.

In the first case, the apex bank imposed a monetary penalty of ₹2.50 lakh on Shree Bharat Co-operative Bank Ltd., Vadodara, Gujarat, for non-compliance with certain directions issued by the RBI on Inspection & Audit Systems in Primary (Urban) Co-operative Banks, Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs, and Know Your Customer (KYC).

According to the RBI, the bank had failed to:

• put in place a system of internal audit;

• establish a system to identify Non-Performing Assets (NPAs) on an ongoing basis and classify certain loans and advances as NPAs; and

• carry out periodic reviews of the risk categorisation of certain accounts, with such periodicity being at least once in six months.

In another case, the central bank imposed a monetary penalty of ₹5 lakh on Sarvodaya Commercial Co-operative Bank Ltd., Mehsana district, Gujarat, for non-compliance with certain directions issued by the RBI.

According to the RBI, the bank had:

• made donations to trusts in excess of the prescribed regulatory ceiling;

• failed to present a true and fair picture of its profits and assets in the profit and loss statement and balance sheet respectively;

• conducted concurrent audits monthly instead of carrying out simultaneous checks of transactions, and submitted reports with delays;

• failed to categorise certain NPAs in the appropriate sub-category; and

• failed to carry out periodic reviews of the risk categorisation of accounts at least once in six months.

In the third case, the RBI imposed a fine of ₹1 lakh on Sardargunj Mercantile Co-operative Bank Limited, Patan, Gujarat, for accepting certain interest-free deposits in accounts other than current accounts.

In the fourth case, the RBI imposed a monetary penalty of ₹1 lakh on The Uma Co-operative Bank Ltd., Vadodara, Gujarat, for failing to conduct an internal audit during the period April 1, 2022, to March 31, 2024.

All these penalties have been imposed in exercise of powers conferred on the RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. DeshGujarat