The Reserve Bank of India (RBI) recently levied a hefty penalty of Rs 2 crore on the State Bank of India (SBI), the largest public sector bank in the country, for non-compliance with regulatory guidelines. This move came in the wake of similar penalties imposed on Canara Bank and Union Bank. However, in an unusual turn of events, a cooperative bank has been fined a mere two rupees, marking a surprising development in banking regulation.

A total penalty of Rs 60.3 lakh has been imposed on five cooperative banks by the RBI for their failure to adhere to regulatory norms. Among them, Rajkot Nagarik Sahakari Bank incurred a penalty of Rs 43.30 lakh for non-compliance with directives concerning the prohibition of loans and advances to directors and their relatives, among other infractions.

Additionally, fines of Rs 5 lakh each were levied on The Kangra Co-operative Bank (New Delhi), Rajdhani Nagar Co-operative Bank (Lucknow), and District Co-operative Bank, Garhwal (Kotdwar, Uttarakhand). Notably, the lowest penalty of two rupees was imposed on District Co-operative Bank, Dehradun. The RBI clarified that these penalties were imposed solely based on regulatory compliance lapses and do not affect the validity of any transactions between the banks and their customers.

Regarding the impact on customers, it was emphasized that these penalties were issued due to regulatory compliance issues and do not impact customer transactions or agreements with the banks. RBI routinely imposes penalties on banks and Non-Banking Financial Companies (NBFCs) for violations of banking regulations, with no direct impact on customer services or operations. Thus, customers can continue their banking activities without disruption despite the fines imposed on the banks.