The Reserve Bank of India on Monday imposed a fine of Rs 2 crore on private sector lender RBL Bank for lapses in regulatory compliance and non-compliance with the provisions of the Banking Regulation Act.
New Delhi. The Reserve Bank of India (RBI) on Monday imposed a fine of Rs 2 crore on private sector lender RBL Bank for lapses in regulatory compliance and non-compliance with the provisions of the Banking Regulation Act. After the inspection of RBL Bank, the Reserve Bank had raised the issue of non-compliance of certain regulatory instructions and the Banking Regulation Act. These include the opening of five savings accounts in the name of the co-operative bank and the composition of the bank’s board of directors.
Later, the central bank issued a notice to RBL Bank asking why it should not be fined for not complying with its directions and not fulfilling the provisions of the Banking Regulation Act. After hearing RBL Bank’s reply to the show cause notice and its oral arguments during the personal hearing, the Reserve Bank came to the conclusion that there was a case for imposition of penalty for these violations.
In another statement, the Reserve Bank said that the Jammu and Kashmir State Co-operative Bank Ltd., Srinagar has also been fined Rs 11 lakh for violation of certain provisions of the Banking Regulation Act, 1949. The statutory inspection of the bank was done by NABARD on 31 March 2019 regarding its financial position.
Earlier in the day, RBI imposed monetary penalty on two more banks for violation/non-compliance. These banks include Jammu and Kashmir State Cooperative Bank Limited and Apna Sahakari Bank in Mumbai. A fine of Rs 11 lakh was imposed on Jammu and Kashmir State Cooperative Bank and Rs 79 lakh on Apna Sahakari Bank.
However, in the matter of imposing the penalty on the three banks, the RBI also said that this penalty has been imposed due to lack of regulatory compliance and it is not intended to decide on the validity of any transaction or agreement entered into by the bank with its customers.
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