Mumbai, Oct 30 (IANS): The RBI has imposed monetary penalties on three co-operative banks in Gujarat for violating official norms in the conduct of their operations.

A penalty of Rs 7 lakh has been imposed on Uma Co-Operative Bank Ltd., Vadodara for contravention of RBI directions issued on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’.

The statutory inspection of the bank conducted by the RBI revealed that the bank had breached the prescribed inter-bank counterparty exposure limit; and also breached the prescribed inter-bank gross exposure limit. Consequently, a show cause notice was issued to the bank.

"After considering the bank’s reply to the notice and oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank," the RBI said in a statement issued on Monday.

Similarly, the RBI has imposed a penalty of Rs 1 lakh on Shihori Nagarik Sahakari Bank Ltd., Shihori in Gujarat\s Banaskantha for non-compliance with its directions on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested'.

The RBI has also imposed a penalty of Rs 2 lakh on Pij People’s Co-operative Bank Ltd, Pij, in Kheda district for non-compliance with the directions related to Know Your Customer (KYC)) norms.

The statutory inspection of the bank revealed that it had failed to carry out periodic review of risk categorisation of accounts.

The RBI also stated that these actions were based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.