Reserve Bank of India (RBI) has imposed a penalty of Rs9.25 lakh on five cooperative banks for non-compliance with the directions issued by the banking regulator.
Reserve Bank of India (RBI) has imposed a penalty of Rs89.95 lakh on five cooperative banks for non-compliance with RBI directions or prohibitory orders. The highest penalty of Rs59.90 lakh has been imposed on Nashik-based Janalaxmi Cooperative Bank Ltd.
RBI deputy governor Swaminathan J countered the notion that a small entity like an Urban cooperative Bank (UCB) is not systemically important. He underscored the importance of governance standards and the inter-connectedness of financial entities. Even a small disturbance can have far-reaching effects and erode public trust. The failure of UCBs in the past highlights the contagion risks posed by smaller banks. UCBs play a critical role in the financial system, serving various sectors of society. Transparent decision-making, accountability, and adherence to best practices are crucial.