RBI penalises two cooperative sector banks

Mumbai: The Reserve Bank has imposed a penalty of Rs 5 lakh each on two cooperative sector lenders – the Pravara Sahakari Bank and the Baroda Traders Co-operative Bank -- for violation of various norms.

"RBI has imposed a monetary penalty of Rs 5 lakh on Pravara Sahakari Bank Ltd, Ahmednagar, Maharashtra... for violation of directives/guidelines of the RBI on maximum limit on advances as modified from time to time, by sanctioning loans to trusts managing different colleges in excess of the single borrower norm," the apex bank said in a statement.

The Baroda Traders Co-operative Bank has been penalised for non-adherence to Know Your Customers (KYC)norms, it said in another statement.

RBI had issued separate show cause notices to these banks in response to which they had submitted written replies.

The central bank, after studying their replies, came to the conclusion that the violations were substantiated and warranted imposition of the penalty, the statements said.

Source: Financial Express