Tag Archives: Cooperative Bank

Co-Operative Banks, Notifcations, Penalty

RBI penalises Shree Vardhaman Sahakari Bank Ltd. Vadodara (Gujarat)

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The Reserve Bank of India has imposed a monetary penalty of Rs1.00 lakh (Rupees one lakh only) on Shree Vardhaman Sahakari Bank Ltd. Vadodara (Gujarat).

 

The penalty was  in exercise of powers vested in Reserve Bank of India,  under the provisions of Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for violation of operational instructions issued by RBI under section 36(1) of the Banking Regulation Act, 1949 (AACS).

 

Vadodara (Gujarat) was recently in the news for the settlement in  Gaekwad royal family. The settlement was for Rs 20,000-cr property dispute

 

The city court had accepted a memorandum signed by 23 members of the Gaekwad royal family to end their feud of 23 years

 

Bank Deposits, Co-Operative Banks, Notifcations, Penalty

Reserve Bank Cancels the Licence of Shri Siddhi Vinayak Nagari Sahakari Bank Ltd.,Rasayani, Raigad Dist., (Maharashtra)

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In view of the fact that Shri Siddhi Vinayak Nagari Sahakari Bank Ltd., Rasayani, Raigad Dist., (Maharashtra) had ceased to be solvent, all efforts to revive it in close consultation with the Government of Maharashtra had failed and the depositors were being inconvenienced by continued uncertainty, the Reserve Bank of India (RBI) delivered the order cancelling its licence to the bank and the same is effective from the close of business as on September 25, 2013.

 

A liquidator will be appointed for the bank. It may be highlighted that on liquidation, every depositor is entitled to repayment of his/her deposits up to a monetary ceiling of Rs1,00,000/- (Rupees One lakh only) from the Deposit Insurance and Credit Guarantee Corporation (DICGC) under usual terms and conditions.

 

The bank was granted a licence by RBI on January 7, 1995 to commence banking business.

Over the years, the RBI inspections revealed:

  • there were large scale accounting manipulations by passing of fraudulent entries from October 18, 2010 to February 25, 2011 by way of fresh fictitious deposits in six dormant savings bank accounts and four term deposit accounts,
  • some loan accounts were also closed by crediting amounts aggregating `312.35 lakh in July 2010 through contra debit of Branch Adjustment account,
  • the bank had granted loans to the father-in-law and the sister-in-law of the ex-Vice Chairperson without any security,
  • the bank had defaulted in maintenance of CRR / SLR during the period October 01, 2010 to March 31, 2011,
  • the bank violated Single Borrower norms,
  • the bank violated directive on unsecured loans,
  • the investment in SLR securities at 17.2% was below the requirement of 25.0% of the applicable NDTL,  the bank had not made provisions for interest liability on matured deposits,
  • the bank had created floating charge on its assets without obtaining approval from RBI thereby violating section 14A of the B.R.Act, 1949 (AACS), (v) the bank had made certain fraudulent entries aggregating Rs923.45 lakh,
  • the bank’s exposure to unsecured advances including the fraudulent entries amounting to Rs923.45 lakh stood at 21.3% of total assets of previous year thereby breaching the limit of 10.0%,
  • the bank had one fraud case outstanding in its books amounting to Rs1141.61 lakh as its Panvel branch but the bank had not initiated any legal action against the employee who committed the above fraud.
  • Penal interest amounting to Rs21,97,768/- was imposed on the bank for non-maintenance of CRR/ SLR from November 2010 to September 2011. The bank had not paid the penal interest till the date of cancellation of licence.

 

From the above, it is conclusively established that

  • The bank is not in a position to pay its present and future depositors;
  • The affairs of the bank were and are being conducted in a manner detrimental to the interests of the depositors;
  • The bank does not comply with section 11(1), 22(3)(a) and 22(3)(b) of the BR Act, 1949 (AACS);
  • The financial position of the bank leaves little scope for its revival and
  • In all likelihood, public interest would be adversely affected if the bank were allowed to carry on its business any further.

 

Therefore, RBI took the extreme measure of cancelling the licence of the bank in the interest of bank’s depositors.

Co-Operative Banks, Customer Service, Introduction, Notifcations, Penalty

The Solapur District Central Co-op. Bank Ltd. penalized

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The word ‘Solapur’, evokes memories of bedsheets and towels. Yes, Solapur is famous for its textiles.

Solapur is also the home of  ‘The Sholapur District Central Co-op. Bank Ltd.’

he above co-operative in violation of RBI guidelines, granted unsecured laons to companies in which the directors of the Board had interest. Further, the cooperative bank, did not report the transactions in the relevant monthly Statement – Form II after sanctioning of the loans.

Hence, Reserve Bank of India,imposed a monetary penalty of Rs5.00 lakh (Rupees Five Lakh only) on the Solapur District Central Co-op. Bank Limited, Solapur (Maharashtra).

The Sholapur District Central Co-operative Bank was registered in 1918 and is part of the  working as a federal financing agency catering for the credit requirements of all the primary credit societies in the district. Since 1962 the Sholapur Zilla Parishad also transacts its financial business through this bank.

Solapur is well known in the pilgrim circuit. The temple prasadam has a specialty called ‘lapshi’.

‘Laphsi’, is type of topping on the rice. This is made of broken wheat, mixed with jiggery or sugar, to give it a distinctive taste.

 

 

 

Re-disseminated by Prashant n. Banker by daytime, blogger by night. Email me @ NSHANTIN (at) gmail

 

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