RBI imposes Rs 50 lakh penalty on Jalgaon People's Co-op Bank

The Reserve Bank of India (RBI) on Monday said it has imposed a penalty of Rs 50 lakh on The Jalgaon People's Co-operative Bank, Jalgaon for non-compliance with norms, including those related to classification of NPA accounts.

The RBI had conducted a statutory inspection of the Maharashtra-based lender with reference to its financial position as on March 31, 2020.

The co-operative bank had not classified certain accounts as non-performing assets in accordance with norms, and had levied penal charges for non-maintenance of minimum balances in saving banks accounts without notifying the customers and without providing one month time for restoration of minimum balances in the accounts.

It also did not pay interest on balance amounts lying in current accounts of deceased individual depositors/ sole proprietorship concerns while making payments to the claimants, the RBI said.

In another statement, the RBI said a penalty of Rs 5 lakh has been imposed on The Andaman & Nicobar State Co-operative Bank Ltd for contravention of norms as it sanctioned unsecured loans to its directors.

The central bank has also imposed penalty on nine other co-operative banks for contravention of certain norms.

However, the RBI said the penalties have been imposed for deficiency in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.