In both cases, the penalty has been imposed based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers, it said.
RBI said the inspection report of Millath Co-operative Bank, based on its financial position as on March 31, 2019, revealed inter alia, violation/non-compliance with the directions on permitting of withdrawals in excess of the stipulated amount and sanctioning of fresh loans and advances in violation of directions issued under Supervisory Action Framework (SAF).
Meanwhile, the inspection report of The Thiruvaikuntam Co-Operative Urban Bank, based on its financial position as on March 31, 2019, revealed that the bank had sanctioned loans to its directors in contravention with the directions issued by RBI in this regard.
Notices were issued to both the banks. After considering their replies and oral submissions made during the personal hearing, RBI came to the conclusion that the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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