The Reserve Bank of India has imposed a monetary penalty of Rs. 5.00 lakh (Rupees five lakh only) on Dharmapuri District Central Co-operative Bank Ltd., Tamil Nadu.
The penalty is for non-adherence to Know Your Customers (KYC) norms and Anti Money Laundering (AML) guidelines.
District Central cooperative banks are primarily owned by State Governments.
The central co-operative banks are located at the district headquarters or some prominent town of the district. The central co-operative banks have three sources of funds,
- Their own share capital and reserves
- Deposits from the public and
- Loans from the state co-operative banks
Their main function is the banks are
- To meet the credit requirements of member-societies
- To perform banking business
- To act as balancing centre for the PACS by diverting the surplus funds of some societies to those which face shortage of funds
- To undertake non-credit activities
- To maintain close and continuous contact with PACS and provide leadership and guidance to them
- To supervise and inspect the PACS (Primary Agricultural Cooperative Banks) and
- To provide a safe place for the investment of the resources of PACs
Dharmapuri District Central Co-operative Bank Ltd., depositors have the benefit of DICGC protection.