Daijiworld Media Network - New Delhi

New Delhi, Sep 25: The Reserve Bank of India (RBI) has imposed financial penalties on five cooperative banks across the country for various regulatory violations, following inspections that revealed non-compliance in key areas such as housing finance, Know Your Customer (KYC) norms, cyber security, and product transparency.

In orders issued on September 22 and 23, the RBI slapped a Rs 10 lakh penalty on Gayatri Co-operative Urban Bank Limited, Jagtial (Telangana) for violating guidelines on the sale of insurance products. The bank was found selling such products without proper disclosure, breaching RBI norms related to the marketing and distribution of financial instruments.

Makarpura Industrial Estate Co-operative Bank Limited in Vadodara (Gujarat) was fined Rs 2 lakh for lapses in KYC compliance and failing to adopt mandated cyber security measures for urban cooperative banks.

The South Canara District Central Co-operative Bank Limited (Karnataka) faced a Rs 1.5 lakh penalty for exceeding permissible limits in housing finance exposure and for illegally holding shares in another cooperative society—actions that contravene the Banking Regulation Act.

Two other banks were each fined Rs 50,000. The Guntur District Co-operative Central Bank Limited (Andhra Pradesh) was penalised for not uploading KYC details to the Central KYC Records Registry (CKYCR) within the required timeframe. Meanwhile, The Tamil Nadu Circle Postal Co-operative Bank Limited was fined for offering deposit interest rates beyond the limits set under the Supervisory Action Framework.

The RBI clarified that the penalties were strictly related to deficiencies in regulatory compliance and did not question the validity of any individual transactions or agreements between the banks and their customers. It further added that these actions are without prejudice to any additional enforcement the central bank may initiate in the future.