RBI imposes Rs 59.90 lakh penalty on Nashik's Janalaxmi Cooperative Bank

The bank had failed to constitute a board of management within the extended timeline granted by RBI, sanctioned credit to nominal members in excess of prescribed limit, and opened/renewed term deposits at higher interest rates than SBI.

Mumbai: The Reserve Bank on Tuesday said it has imposed a penalty of Rs 59.90 lakh on Nashik-based Janalaxmi Cooperative Bank for non-compliance with regulations.

The Reserve Bank found out that the bank had failed to constitute a board of management within the extended timeline granted by RBI, sanctioned credit facilities to its nominal members in excess of the prescribed limit, and, opened/renewed term deposits at interest rates higher than those offered by the State Bank of India for the same tenor.

The bank was served with a show cause notice, after which the penalty was imposed in exercise of powers under the sections of the Banking Regulation Act, an official statement said.

The central bank also imposed a penalty of Rs 28.30 lakh on Solapur Janata Sahakari Bank for appointing a member on its board of management who did not satisfy the 'fit and proper' criteria and failure to reconstitute the panel within the specified time and contravention of Supervisory Action Framework by the lender by sanctioning fresh loans carrying risk weights of more than 100 per cent in FY22.

It also imposed a fine of Rs 50,000 on Chikkamagaluru District Cooperative Central Bank, Karnataka for delay in reporting of frauds to National Bank for Agriculture and Rural Development (NABARD).

The RBI said it has also imposed a monetary penalty of Rs 25,000 on The Dindigul Urban Co-operative Bank from Tamil Nadu for sanction of loans to nominal members in excess of the prescribed ceiling.