Two years since the government vested more powers with the RBI to supervise cooperative banks, the regulator has tightened the leash on the lenders, routinely imposing penalties for deviating from regulatory norms.
After the crisis at erstwhile Mumbai-based Punjab and Maharashtra Cooperative (PMC) Bank, the government amended the Banking Regulation Act as applicable to cooperative societies. The amendment, first issued as an ordinance in June 2020, gave RBI supervisory powers over such banks. So far in 2022, RBI has fined 100 cooperative banks, as against 124 in 2021 and 22 in 2020, showed data.
Penalties imposed on these banks include Rs. 37.5 lakh for non-adherence to fraud reporting guidelines; Rs. 25 lakh for non-compliance of norms on housing finance; Rs. 15 lakh for deviation from RBI’s income recognition, asset classification and provisioning norms; and Rs. 10 lakh for violation of exposure norms, besides others.