RBI has imposed penalty on two cooperative banks

By | September 17, 2011

A recent press report said that the Reserve Bank of India has imposed penalty on two cooperative banks for not abiding by the norms of the central bank. The two cooperative sector lenders – the Pravara Sahakari Bank and the Baroda Traders Co-operative Bank have been imposed a monetary penalty of Rs. 5 lakh for not adhering to the guidelines of the Central Bank.

In its statement the RBI said that the Maharashtra based cooperative bank, Pravara Sahakari Bank Ltd. has been penalized on account of exceeding the maximum limit on advances which is being modified from time to time by the RBI. The bank has violated the guidelines by sanctioning loans to trusts that manage different colleges in excess of the single borrower norm.

The Apex bank said in its another statement that the Baroda Traders Co – operative Bank was imposed penalty for not adhering to the Know Your Customer (KYC) norms.

The RBI has hiked its base rates recently in order to control the growing inflation. The earlier hikes have already leaded to the slowdown in loan business of the banks; it has also made it mandatory for all banks to increase their loan rates (home loan, personal loan, business loans, vehicle loan etc.)

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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