The Reserve Bank of India has imposed a monetary penalty of Rs. 5.00 lakh (Rupees five Lakh only) on CKP Co-operative Bank Ltd., Mumbai, Maharashtra , in exercise of powers vested in it under the provisions of Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) for violation of the Reserve Bank of India's directive / guidelines on opening of on-site ATMs, extending finance to borrowers outside area of operations, exceeding exposure to housing and real estate, single party exposure limit, loans to directors, issuing bank guarantee to an entity not banking with them, non-filing of Suspicious Transaction Report (STR) report to Financial Intelligence Unit-India (FIU-IND), exceeding individual limit of unsecured advances, sanctioning overdraft against third party FDs to one of its directors.

The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply. On careful examination of the reply and the action taken by the bank in this regard, the Reserve Bank came to the conclusion that the violation was substantiated and warranted imposition of the penalty and accordingly, the penalty was imposed on the bank.

Ajit Prasad

Assistant General Manager

Press Release : 2012-2013/890

Regulatory penalty for banking compliance breaches after show cause process resulted from multiple prudential violations. A regulatory monetary penalty was imposed following a show cause process and examination of the bank's reply, concluding that multiple breaches of prudential and operational norms were substantiated. Breaches included directives on on site ATM openings, extension of finance outside the area of operations, excessive exposure to housing and real estate, single party exposure limits, unsecured advance limits, loans to directors, issuance of guarantees for non customers, and non filing of Suspicious Transaction Reports.