The Reserve Bank of India has fined a hefty penalty of Rs. 5.93 crores to the Mehsana Urban Co-operative Bank Limited, the multi-state scheduled bank having it’s corporate office at Mehsana. This is not the first time that the Bank has come under the scanner for improprieties and invited the monetary penalty. In 2019 also the RBI imposed a penalty of Rs. 5 crores. In 2018 also there were news reports of Rs. 1 crore penalty imposed on the Mehsana Urban Co-operative Bank Limited.
The Mehsana Urban Co-operative Bank Limited is found receiving donations to Trusts and Institutions where Directors or their relatives hold positions, in direct contravention of the RBI guidelines. The Bank also failed to initiate any action for implementation of cyber security. Not only that, the bank, run by a host of officers retired from the Bank of Baroda, flaunted the NPA norms and allowed multiple customer IDs to the same customer. The irregularities were flagged during the statutory audit by the Reserve Bank of India. The penalty order came after the Mehsana Urban Co-operative Bank Limited’s reply to the show cause notice was found unsatisfactory by the Reserve Bank.
The Reserve Bank of India order dated July 03, 2024, said that the bank was guilty of non-compliance with certain directions issued by RBI on ‘Loans and advances to directors and their relatives, and firms/concerns in which they are interested’, ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs)’, ‘Income Recognition, Asset Classification, Provisioning, and Other Related Matters’, ‘Know Your Customer (KYC) Norms’ and ‘Donations to Trusts and Institutions where Directors, their relatives hold position or are interested’, under provisions of section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Also Read: Gujarat: Govt Officials Defraud State, Nine Crore Scam In Navsari
