RBI penalises two co-op banks

Written by Press Trust of India | Mumbai | Updated: Oct 29 2011, 09:19am hrs
The Reserve Bank of India (RBI) has imposed a penalty of R5 lakh each on two cooperative sector lenders the Pravara Sahakari Bank and the Baroda Traders Co-operative Bank for violation of various norms.

The RBI has imposed a monetary penalty of R5 lakh on Pravara Sahakari Bank, Ahmednagar, Maharashtra... for violation of directives and 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 statement said.