Despite the strictness imposed by the Reserve Bank of India (RBI), the rules are being violated continuously by the banks. This is the reason why RBI has also imposed penalty on many banks. One such action has been taken on the Vasai Vikas Sahakari Bank of Maharashtra.
New Delhi. The Reserve Bank of India (RBI) on 26 October imposed monetary penalty on two co-operative banks for violating various rules. These two banks are Vasai Vikas Sahakari Bank, Maharashtra and Nagrik Urban Co-operative Bank Ltd., Jalandhar, Punjab. The Reserve Bank on Tuesday said it has imposed a fine of Rs 90 lakh on Maharashtra’s Vasai Vikas Sahakari Bank for non-compliance of certain directions. These include classification of loans as bad loans (NPA) and other instructions.
Apart from this, a fine of Rs 7 lakh has been imposed on Nagrik Urban Co-operative Bank for violation of norms related to income recognition, asset classification, provisioning.
Penalty imposed for this reason
The Reserve Bank said in a statement that the bank has not complied with its instructions to ensure end-use of funds in borrowal accounts and classification of loans as non-performing assets or NPAs. The bank also did not comply with the RBI’s specific directive to ensure that the books of account and profit and loss account of the bank should be signed by at least three of its directors.
The Reserve Bank said that this disclosure has come to the fore after examining the statutory inspection of the bank, its inspection report and all related correspondence with regard to the financial position of the bank as on March 31, 2019.
Rs 1 crore fine imposed on PPBL
Earlier, the RBI had imposed a penalty of Rs 1 crore on Paytm Payments Bank Limited (PPBL). According to an order dated October 1, 2021, the central bank imposed a fine of Rs 1 crore on Paytm Payments Bank Limited. RBI said in a statement that this penalty is being imposed on Paytm Payment Bank for an offense under section 26 (2) of the Payment and Settlement System Act, 2007 (PSS Act).
