reserve Bank of India A fine of Rs 1.25 crore has been imposed on Parsi Cooperative Bank, Mumbai for non-observance of certain directions including one relating to discounting of bills. In a release the reserve Bank of India stated that the bank has failed to comply with the provisions of its instructions and regulations on ‘Discounting of Bills by UCBs – Restricted Letter of Credit (LC)’, as it is discounting housing bills under LC without establishing the genuineness of the underlying transactions/documents. and failed to preserve the records in good condition for a period of eight years.

In a separate release, the RBI said a penalty of Rs 20 lakh has been imposed Indian Mercantile Co-Operative BankLucknow for non-adherence to certain norms relating to classification of non-performing assets.

The central bank also imposed penalty on five other cooperative banks.

However, RBI said the penalty is based on lack of regulatory compliance and is not intended to pronounce upon the legality of any transactions Or the agreement entered into by the banks with their customers.