The Reserve Bank of India (RBI) has imposed penalties on Millath Co-operative Bank (MCB) and The Thiruvaikuntam Co-operative Urban Bank Ltd (TCUB) for non-adherence of directions and prohibitions imposed on them.

MCB was fined Rs 10 lakh by the central bank for non-adherence and violation of directions imposed on the bank. A penalty of Rs 5 lakh was imposed on TCUB for contravention of directions issued by RBI on the prohibition of loans and advances to directors.

RBI in separate statements said that the actions were based on deficiencies in regulatory compliance and were not intended to pronounce upon the validity of any transaction or agreement entered by the banks with its customers.

An inspection report on the financial position of MCB on March 31, 2019, revealed violation and non-compliance with the All-Inclusive Directions issued by RBI on permitting withdrawals in excess of the stipulated amount and sanctioning fresh loans and advances in violation of directions issued under Supervisory Action Framework (SAF).

Based on the report, a show-cause notice was issued to MCB. After considering MCB’s reply and oral submissions during the personal hearing, RBI concluded that the charges of non-compliance were substantiated and warranted the imposition of the monetary penalty.