The Reserve Bank of India (RBI) has taken major action on Indian Bank and Mahindra & Mahindra Financial Services. Indian Bank has been fined Rs 1.61 crore.
The Reserve Bank of India (RBI) has taken major action on Indian Bank and Mahindra & Mahindra Financial Services. Both of them have been fined for some deficiencies in regulatory compliance. Indian Bank has been fined Rs 1.61 crore for violating certain provisions of the Banking Regulation Act and not following certain instructions on interest rates on loans, Kisan Credit Card (KCC) scheme and loans to micro, small and medium enterprises (MSME) sector.
Action on Mahindra & Mahindra Financial
The central bank said in another statement that the RBI imposed a fine of Rs 71.30 lakh on ‘non-banking financial company – Mahindra & Mahindra Financial Services for non-compliance of certain provisions. The central bank said that the penalties in both the cases are based on deficiencies in regulatory compliance and are not intended to decide on the validity of any transaction or agreement entered into by the entities with their customers.
License of this bank cancelled
The Reserve Bank informed about cancelling the license of Jalandhar-based Imperial Urban Co-operative Bank. This step was taken because the bank did not have sufficient capital and earning prospects. The Registrar of Cooperative Societies of the Punjab Government has also been requested to issue an order to close the bank and appoint a liquidator for the bank. Earlier, on April 22, the RBI had cancelled the license of Aurangabad-based Ajanta Urban Cooperative Bank Limited. The RBI said that Ajanta Urban Cooperative Bank does not have sufficient capital and earning prospects.
What will happen to the customers of these two banks
Each depositor of the bank will get an amount of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC). In this way, 91.55 percent of the depositors will be able to get their entire deposit amount.
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