Pune: The Reserve Bank of India (RBI) has imposed a penalty of Rs one crore on Janata Sahakari Bank Ltd, Pune for violating income recognition, advances management and asset classification norms.
However, the CEO of Janata Sahakari Bank Ltd stated that the financial condition of the bank has improved after March 2019.
“The non-performing assets (NPA) of our bank on March 31, 2018 was high and therefore the action was taken by RBI accordingly. However, the financial condition of the bank improved after March 2019,” said Janata Sahakari Bank Ltd Chief Executive Officer Jayant Kakatkar.
According to Kakatkar, as on March 2018, out of total loan amount, bank has 6.92 per cent of NPA while as per the RBI inspection officials bank has 13.98 per cent of NPA out of the total loan amount. Therefore, they have taken this decision.
The RBI has also imposed Rs 25 lakh penalty on another cooperative bank of the State - Jalgaon Peoples Co-operative Bank for violating income recognition, advances management and asset classification norms.
In a press statement, the RBI stated it has imposed, by order dated October 16, 2019, monetary penalty of Rs one crore on Janata Sahakari Bank Ltd, Pune for non-compliance with directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms, Management of Advances and Exposure Norms and Statutory/ Other Restrictions. In a similarly-worded but separate release, it said monetary penalty of Rs 25 lakh has been imposed on Jalgaon Peoples Co-operative Bank, Jalgaon, for non-compliance of these norms.
The penalty has been imposed in exercise of powers vested in the RBI under provisions of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by the RBI.
“There has always been a mismatch in understanding between the bank and RBI officials, and so there is need to set up apex level body to solve issues faced by cooperative banks and the same has been proposed to RBI and Ministry of Finance,” said Vidyadhar Anaskar, President, Maharashtra State Urban Cooperative Federation.
The RBI has, by an order dated October 29, 2019 also imposed a penalty of Rs 1 crore on Bandhan Bank Limited for non-compliance with guidelines on promoter holding contained in ‘Guidelines for Licensing of New Banks in Private Sector’ dated February 22, 2013 (licensing guidelines) read with conditions imposed by RBI in exercise of powers under section 22 of the Banking Regulation Act, 1949 (the Act) at the time of issuing banking licence to the bank.
