The Reserve Bank of India (RBI) on June 6 imposed a monetary penalty on Bassein Catholic Co-operative Bank and Jila Sahakari Kendriya Bank Maryadit for non-compliance with certain directives issued by it.

 

The central bank imposed a monetary penalty of Rs 49 lakh on Bassein Catholic Co-operative Bank for violating norms related to income recognition, asset classification, provisioning and other related matters, the RBI said in a release.

 

Bassein Catholic Co-operative Bank had upgraded and regularised loan accounts of borrowers without recovering overdue amounts and had not classified existing non-performing loan accounts of borrowers as NPAs, on restructuring, the central bank said.

 

It has also imposed a penalty of Rs 50,000 on Morena-based Jila Sahakari Kendriya Bank Maryadit regarding violation of the RBI’s Know Your Customer (KYC) norms. After inspection, it was found that the bank had no system in place to identify suspicious transactions, in contravention of and non-compliance with the directions, the RBI said.

 

Both the actions are based on deficiency in regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

 

The RBI has been tightening its noose on regulated entities, specifically cooperative banks, to ensure that appropriate corporate governance practices are followed.