RBI imposes monetary penalty on Prathamik Shikshak Sahakari Bank Ltd, Satara, Maharashtra
RBI penalized Prathamik Shikshak Sahakari Bank in Satara for lending violations, including loans to non-members.
RBI Imposes Rs 2 Lakh Penalty on Prathamik Shikshak Sahakari Bank for Regulatory Violations
The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.00 lakh (Rupees Two Lakh only) on Prathamik Shikshak Sahakari Bank Ltd, Satara, Maharashtra (the bank) for non-compliance with certain directions issued by RBI on ‘Advances against Term Deposits of Non-members’ to Salary Earners’ Primary (Urban) Co-operative Banks.
The penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2024. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by it, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty: The bank, despite being a Salary Earners’ Primary (Urban) Co-operative Bank, had sanctioned loans against fixed deposits to non-members, without fulfilling the Financially Sound and Well Managed
(FSWM) criteria; and gold loans to non-members.
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This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
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