RBI canceled licenses of 2 NBFCs. Ban on money transactions with immediate effect. Penalty on many banks.

Strict action of Reserve Bank of India: Fine on cooperative banks and cancellation of license of NBFC. The Reserve Bank of India (RBI) recently imposed monetary penalty on three co-operative banks and canceled the Certificate of Registration (CoR) of two non-banking finance companies (NBFCs). A press release has also been issued on this.

fine on co-operative banks

This action has been taken on three co-operative banks located in Kheda district of Gujarat:

1. The Kheda People's Co-operative Bank Limited
2. The Kapadvanj People's Co-operative Bank Limited
3. Lunawada Nagarik Cooperative Bank Limited

A total monetary penalty of lakhs of rupees has been imposed on these banks. Notably, a fine of Rs 2.10 lakh has been imposed on Lunawada Nagrik Sahakari Bank Limited. There are several reasons behind this such as the bank failing to submit credit information of its borrowers to the three CICs and opening an ATM without prior approval.

License of non-banking finance companies canceled

The licenses of Ulhas Securities Private Limited (Gandhinagar, Gujarat) and Sikar Investment Co-operative Limited (Bharatpur City, Rajasthan) have been cancelled. Now these companies will not be able to do business as NBFCs.

information for customers

Bank customers do not need to panic. This action of RBI is only in compliance with the rules and will not affect the customer accounts of banks. There will be no impact on transactions and agreements, so customers can rest assured, only units operating as NBFCs whose licenses have been canceled will be completely affected.