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The Reserve Bank on Monday imposed a penalty of Rs 2 crore on private lender RBL Bank for deficiencies in regulatory compliances and non-compliance of the provisions of the Banking Regulation Act.
Following supervisory evaluation of the RBL Bank, the Reserve Bank raised issues relating to contravention of certain regulatory directions and non-compliance with the provisions of the Banking Regulation Act concerning opening of five savings accounts in the name of a cooperative bank and composition of the board of directors.
The RBI later issued a notice to the bank advising it to show cause as to why penalty should not be imposed for contravention of and non-compliance with the provisions of its directions and provisions of the Banking Regulation Act.
“After considering the bank’s reply to the show cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of contravention of/non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank,” the RBI said.
The action, the central bank further said, was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
In another statement, it said a penalty of Rs 11 lakh has been imposed on The Jammu & Kashmir State Co-operative Bank Limited, Srinagar for contravention of certain section of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by NABARD with reference to the bank’s financial position as of March 31, 2019.
The inspection report pertaining thereto revealed contravention of section 23 read with section 56 of the Banking Regulation Act, 1949 as the bank had opened branches without obtaining the prior permission of the RBI.
The RBI said the penalty was based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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