RBI said that this action has no intention of adjudicating on the validity of any transaction or agreement entered into by the Bank for its customers.
File photo (Source: Reuters)
The Reserve Bank of India (RBI) on Monday imposed a fine of Rs 2 crore on private bank RBL Bank for not complying with the rules of the Regulatory Compliance and Banking Regulation Act.
Following the supervisory evaluation of RBL Bank, the RBI has issued notices regarding violation of certain regulatory compliances and non-compliance with the provisions of the Banking Regulation Act regarding opening of savings accounts in the name of a co-operative bank and composition of the Board of Directors.
RBI has issued a notice to the bank asking it to show reasons why a penalty should not be imposed on it for violation and non-compliance with its directions and provisions of the Banking Regulation Act.
The apex bank said that after considering the reply of the bank to the show cause notice, the presentation made during the personal hearing and examination of the additional submissions made by the bank, RBI has come to the conclusion that the charge of contravention/non-compliance were substantiated and warranted imposition of monetary penalty on the bank.
RBI further said that this action has been taken due to a reduction in regulatory compliances. It has no intention of adjudicating on the validity of any transaction or agreement entered into by the Bank for its customers.
“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 said.
In another statement, RBI said that a fine of Rs 11 lakh has been imposed on Jammu and Kashmir State Co-operative Bank Limited, Srinagar for violation of certain sections of the Banking Regulation Act, 1949.
The statutory inspection of the bank was done by NABARD with reference to the financial position of the bank as on 31 March 2019.
During the inspection, violation of Section 23 as well as Section 56 of the Banking Regulation Act, 1949 was detected as the Bank had opened its branches without prior approval of RBI.