A penalty of Rs 10 lakh has been imposed on Millath Co-operative Bank for “non-adherence/violation of all inclusive directions and other directions imposed on the bank”, the Reserve Bank of India (RBI) mentioned in a press release.
In one other assertion, it mentioned a financial penalty of Rs 5 lakh has been imposed on The Thiruvaikuntam Co-operative Urban Bank Limited, Thoothukudi (Tamil Nadu) for contravention of the instructions issued by RBI on prohibition of loans and advances to administrators.
In each instances, the penalty has been imposed based mostly on deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the banks with their clients, it mentioned.
RBI mentioned the inspection report of Millath Co-operative Bank, based mostly on its monetary place as on March 31, 2019, revealed inter alia, violation/non-compliance with the instructions on allowing of withdrawals in extra of the stipulated quantity and sanctioning of recent loans and advances in violation of instructions issued beneath Supervisory Action Framework (SAF).
Meanwhile, the inspection report of The Thiruvaikuntam Co-Operative Urban Bank, based mostly on its monetary place as on March 31, 2019, revealed that the financial institution had sanctioned loans to its administrators in contravention with the instructions issued by RBI on this regard.
Notices had been issued to each the banks. After contemplating their replies and oral submissions made throughout the private listening to, RBI got here to the conclusion that the fees of non-compliance with instructions had been substantiated and warranted imposition of financial penalty.