RAICHUR: The Reserve Bank of India has levied penalties on Raichur District Central Cooperative Bank Ltd for non-compliance with regulatory directives.
According to an RBI press release dated November 28, chief general manager Puneet Pancholy announced that a penalty of Rs.50,000 was imposed on RDCC Bank on November 25 for violating section 20 read with section 56 of the Banking Regulation Act, 1949.
The National Bank for Agriculture and Rural Development (NABARD) conducted a statutory inspection of the bank’s financial position as of March 31, 2023. Following the discovery of statutory violations and subsequent correspondence, the bank received a show-cause notice regarding its non-compliance with BR Act provisions.
“After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the bank sanctioned loans to its directors. Since the charge against the bank is sustained, warranting imposition of monetary penalty,” Pancholy explained.
He emphasised that this penalty addresses regulatory compliance issues and does not comment on the bank’s customer transactions. The RBI reserves the right to take additional actions against the bank.
Last month, 14 RDCC Bank members faced accusations of defrauding farmers through fraudulent loan disbursements, involving unauthorised transfers between accounts.
Five criminal cases were filed against fourteen individuals, including the bank’s Managing Director, Directors, Manager, and Cashier. Four cases were registered at Mudagal police station and one at Lingasugur police station.
Concurrent with the RBI penalty, the Mundargi Primary Agricultural Credit Cooperative Society in Devdurg taluk discovered a fraud exceeding ₹60 lakh through farmers’ refund inquiries. Devdurg RDCC Bank confirmed that former Secretary Mallaiah misappropriated farmers’ refunds.
Shivraj Karnal, the association’s President, confirmed that Malliah deceived farmers across 9 villages under the PACCS, stating that legal action would be initiated following a general body meeting.
Doddappa Desai, Chairman of Gangavathi PLD Bank and a member of RDCC Bank, expressed to TOI the necessity for a comprehensive examination of RDCC Bank’s operations. He noted that ongoing irregularities undermined the trust of the bank’s customers. He emphasized that for the bank, currently managed by certain individuals, to restore customer confidence, an unbiased investigation is essential.
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According to an RBI press release dated November 28, chief general manager Puneet Pancholy announced that a penalty of Rs.50,000 was imposed on RDCC Bank on November 25 for violating section 20 read with section 56 of the Banking Regulation Act, 1949.
The National Bank for Agriculture and Rural Development (NABARD) conducted a statutory inspection of the bank’s financial position as of March 31, 2023. Following the discovery of statutory violations and subsequent correspondence, the bank received a show-cause notice regarding its non-compliance with BR Act provisions.
“After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the bank sanctioned loans to its directors. Since the charge against the bank is sustained, warranting imposition of monetary penalty,” Pancholy explained.
He emphasised that this penalty addresses regulatory compliance issues and does not comment on the bank’s customer transactions. The RBI reserves the right to take additional actions against the bank.
Last month, 14 RDCC Bank members faced accusations of defrauding farmers through fraudulent loan disbursements, involving unauthorised transfers between accounts.
Five criminal cases were filed against fourteen individuals, including the bank’s Managing Director, Directors, Manager, and Cashier. Four cases were registered at Mudagal police station and one at Lingasugur police station.
Concurrent with the RBI penalty, the Mundargi Primary Agricultural Credit Cooperative Society in Devdurg taluk discovered a fraud exceeding ₹60 lakh through farmers’ refund inquiries. Devdurg RDCC Bank confirmed that former Secretary Mallaiah misappropriated farmers’ refunds.
Shivraj Karnal, the association’s President, confirmed that Malliah deceived farmers across 9 villages under the PACCS, stating that legal action would be initiated following a general body meeting.
Doddappa Desai, Chairman of Gangavathi PLD Bank and a member of RDCC Bank, expressed to TOI the necessity for a comprehensive examination of RDCC Bank’s operations. He noted that ongoing irregularities undermined the trust of the bank’s customers. He emphasized that for the bank, currently managed by certain individuals, to restore customer confidence, an unbiased investigation is essential.
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