RBI Imposes Penalty on Fatehabad Central Cooperative Bank for Non-Compliance with Unclaimed Funds Transfer Rules

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2 lakh on The Fatehabad Central Cooperative Bank Limited, Fatehabad, for contravention of the provisions of section 26A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act).

The penalty was imposed based on the findings of a statutory inspection conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to the bank’s financial position as on March 31, 2022. The inspection revealed that the bank had not transferred the eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time limit.

This action is in violation of the provisions of section 26A (2) read with section 56 of the Banking Regulation Act, 1949 (BR Act).

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The RBI has clarified that this action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

This is not the first time that RBI has imposed a penalty on a cooperative bank for non-compliance with its directions. In recent months, RBI has imposed penalties on several other cooperative banks for similar violations.

This highlights the importance of cooperative banks adhering to RBI’s directions and maintaining high standards of corporate governance.

Source: Reserve Bank of India – Press Releases