Amalgamation of these two banks approved by RBI. Check updates if you have accounts in them
RBI to Issue New ₹100 and ₹200 Notes: What Happens to Old Notes?
On January 3, the Reserve Bank of India announced that it has given the green light for the voluntary merger of The National Co-operative Bank Ltd. located in Bangalore, Karnataka, with Cosmos Co-operative Bank Limited from Maharashtra.
According to the release, “The Scheme has been sanctioned in exercise of the powers conferred under Sub-Section (4) of Section 44A read with Section 56 of the Banking Regulation Act, 1949.”
Starting January 6, the branches of the National Co-operative Bank Ltd. in Bangalore (Karnataka) will operate as branches of Cosmos Co-operative Bank Limited from Maharashtra.
“The Reserve Bank of India conducted a statutory inspection of the bank to assess its financial status as of March 31, 2023. Following the inspection, the RBI identified instances of non-compliance with its directives and issued a notice to the bank, asking it to explain why a penalty should not be imposed for these failures. After reviewing the bank’s response to the notice, considering oral arguments during a personal hearing, and examining additional submissions, the RBI determined that certain charges against the bank were valid, leading to the decision to impose a monetary penalty,” the RBI stated in the press release.
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹8.30 lakh (Rupees Eight Lakh Thirty Thousand only) on The Cosmos Co-operative Bank Ltd. as of December 31, 2024. This penalty was issued for non-compliance with specific directions regarding the ‘Management of Advances – UCBs’.
RBI clarified that this action stems from deficiencies in regulatory compliance and does not comment on the validity of any transactions or agreements made by the bank with its customers. Additionally, the imposition of this monetary penalty does not preclude any further actions that may be taken by RBI against the bank. The bank had previously charged foreclosure fees on floating rate term loans granted to certain individual borrowers.
The National Cooperative Bank Ltd. operates a total of 13 branches, with 12 located in Bangalore and one in Mysore. In the financial year ending March 2024, Mumbai-based Maratha Sahakari Bank, which has 7 branches, and Sahebrao Deshmukh Sahakari Bank, with 11 branches, merged into Cosmos Bank.
In July 2023, the RBI imposed business restrictions on The National Co-operative Bank Ltd., limiting deposit withdrawals to Rs 50,000 per account. This action was a response to the bank’s weak financial position.
