RBI Penalty: The Reserve Bank has been showing strictness for a long time regarding regulatory compliance. The Reserve Bank has imposed a fine on two more banks for violating the rules.
RBI Penalty: The Reserve Bank of India (RBI) has imposed a penalty on two banks. This penalty has been imposed on banks for violating some rules of the Reserve Bank. According to the Reserve Bank, Dhanlaxmi Bank has been fined Rs 27.5 lakh for violation of rules related to ‘Depositor’s Education and Awareness Fund Scheme’. Whereas the Multi-State Primary Cooperative Bank of NE and EC railway employees present in Gorakhpur has been fined Rs 20 lakh for violations of certain regulatory compliances.
Dhanlaxmi Bank fined the bank
In a statement issued by the Reserve Bank, the penalty has been imposed on Dhanlaxmi Bank for contravention of a section of the Banking Regulation Act, 1949. which reads with a paragraph from the Depositor Education and Awareness Fund Scheme, 2014 (Scheme). While this penalty has been imposed on the primary cooperative bank due to non-compliance of specific instructions.
Notices were also issued to banks
The Reserve Bank said that the statutory inspection for Supervisory Assessment (ISE) of the bank was conducted with reference to its financial position as on March 31, 2020, and examination of the Risk Assessment Report and Inspection Report relating to the same as well as the provisions of the Act. violation was detected. A notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for the violation.
What will be the effect on customers
According to RBI- After considering the bank’s reply to the notices and oral submissions made during the personal hearing, the Reserve Bank came to the conclusion that the allegation of contravention of the above provisions of the Act read with the scheme was substantiated and the bank It is necessary to impose a monetary fine. However, the Reserve Bank clarified that this penalty is based on deficiencies in regulatory compliance and does not raise any question on the validity of any transaction or agreement entered into by the co-operative bank with its customers.
Even before this, action on many banks
In July last month, Axis Bank was fined Rs 5 crore for violating the rules. Along with this, 14 banks were also fined above for violating some rules related to disbursement of loans. This included banks like State Bank of India (SBI), IndusInd Bank, Bandhan Bank and Bank of Baroda. The Reserve Bank had imposed a fine ranging from Rs 50 lakh to Rs 2 crore on these banks.
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