HomeCURRENT AFFAIRSBUSINESSRBI imposes monetary penalty on RBL Bank

RBI imposes monetary penalty on RBL Bank

Reserve Bank of India (RBI) on September 27 imposed a monetary penalty of Rs 2 crore on RBL Bank for contravention of former’s directions on Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 and non-compliance with provisions of clause (b) of sub-section (2) of section 10A of the Banking Regulation Act, 1949, RBI said in a release.

For the non-compliance with the provisions of section 10 A (2) (b) of the Act, a penalty is also imposed for the period during which the contravention or default continued. This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Act.

“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” RBI further stated.

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A notice was then issued to the bank advising it to show cause as to why the penalty should not be imposed for contravention and non-compliance.

“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,” it said.

RBI imposes penalty on J&K state Co-operative Bank

Furthermore, the RBI informed that it has now imposed a penalty of Rs 11 lakh on The Jammu & Kashmir State Co-operative Bank Limited, Srinagar for ignoring certain rules of the Banking Regulation Act, 1949.

The statutory inspection of the bank was conducted by NABARD. The inspection was held in reference to the bank’s financial position as of March 31, 2019.

Following the inspection, the bank was revealed that the bank had opened branches without obtaining the prior permission of the RBI.

(With inputs from agencies)

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