RBI imposes monetary penalty on The Yashwant Co-operative Bank Limited, Satara, Maharashtra

Case Brief

RBI, by order dated July 16, 2024, imposed a monetary penalty of ₹5.00 lakh on The Yashwant Co-operative Bank Limited, Satara, Maharashtra. The penalty was levied after a statutory inspection and a show-cause process, with RBI finding sustained contraventions of section 26A read with section 56 of the Banking Regulation Act, 1949, as well as non-compliance with RBI directions relating to income recognition, asset classification and provisioning, exposure norms, KYC, and maintenance of deposit accounts for urban co-operative banks. The bank’s lapses included failure to classify certain loan accounts as NPAs and provision accordingly, sanctioning loans beyond permitted unsecured advance and member exposure ceilings, not reviewing customer risk categorisation as required, not transferring long-unclaimed balances to the DEAF, and charging penal fees for minimum balance shortfalls without customer notification.