BBN Bureau
OTTAPALAM/August 30-2022: The Reserve Bank of India (RB I) has imposed a monetary penalty of Rs5 lakh on The Ottapalam Co-operative Urban Bank Ltd, Kerala, for various issues including the non-adherence of norms with regard to income recognition, asset classification and provisioning.
There was violation on Know Your Customer (KYC) Guidelines – Primary (Urban) Co-operative Banks too, according to a statement issued by the RBI.
“This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 (AACS), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI,” the statement said.
Background
RBI stated that the inspection report of the bank based on its financial position as on March 31, 2020, revealed inter alia, violation/non-compliance with directions issued on Income Recognition, Asset Classification, Provisioning and Other related Matters-UCBs and Know Your Customer (KYC) Guidelines – Primary (Urban) Co-operative Banks.
Based on the same a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the bank’s reply and oral submissions during the personal hearing, RBI came to the conclusion that the charges of non-compliance with RBI directions were substantiated, and warranted imposition of monetary penalty.
On Monday, RBI penalised several other cooperative banks too, including Bharat Heavy Electricals Employees Cooperative Bank, Thiruchirappali, Tamil Nadu; The Darussalam Cooperative Urban Bank Ltd, Hyderabad; The Visakhpatnam Cooperative Bank Ltd, Visakhpatnam; The Nellore Cooperative Urban Bank Ltd, Gandhi Nagar, Nellore; The Kakinada Cooperative Town Bank Ltd, East Godavari District, AP; The Kendrapara Urban Cooperative Bank Ltd, Kendrapara, Odisha and The National Urban Cooperative Bank Ltd, Pratapgarh, UP.
