Mumbai: The Reserve Bank has imposed a penalty of Rs.15 lakh on two cooperative sector banks for not following the instructions.
Giving this information, the Reserve Bank said in a statement that a penalty of Rs.10 lakh has been imposed on Milath Co-operative Bank of Davanagere, Karnataka.
This penalty was imposed for not following the instructions given by the central bank to the banks.
In another statement, the Reserve Bank said that Thiruvaikuntam Co-operative Urban Bank Ltd, based in Tuticorin, Tamil Nadu, has been fined Rs.5 lakh for not following its instructions. The bank was prevented from giving loans and advances to directors. The statement said that in both the cases, the penalty has been imposed due to lack of regulatory compliance.
This flaw was revealed in the inspection report of both banks, after which the notice was sent to both the banks. The central bank found the allegations leveled against them after their written answers and oral replies at personal hearings. Subsequently, the Reserve Bank decided to impose an economic penalty on them.