RBI imposed a fine of lakhs of rupees on two banks, action taken due to violation of rules
The Reserve Bank of India has imposed a fine on two banks of the country. This penalty has been imposed on both the banks for violating different rules. 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’. At the same time, the central bank has also imposed a penalty of Rs 20 lakh on Gorakhpur-based multi-state primary cooperative bank of Northeast (NE) and Middle Eastern (EC) railway employees for violating certain norms.
In a statement, RBI said that Dhanlaxmi Bank has been fined for contravention of a section of the Banking Regulation Act, 1949. At the same time, this penalty has been imposed on the primary cooperative bank due to non-compliance of specific instructions.
Based on the financial position of the Multi-State Primary Co-operative Bank of Northeast (NE) and Middle Eastern (EC) Railway employees, specific instructions issued under the Supervisory Action Framework (SAF) in the Bank’s Inspection Report as on March 31, 2019, the statement said. came to know about non-compliance or violations. Based on the report, a show cause notice was issued to the co-operative bank.
“The RBI, after considering the bank’s reply and oral submissions during the personal hearing, came to the conclusion that the above allegation of non-compliance or violation of its directions was substantiated and, therefore, warranted imposition of monetary penalty,” the central bank said. The RBI, however, added that the penalty is based on deficiencies in regulatory compliance and does not question the validity of any transaction or agreement entered into by the co-operative bank with its 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 violation of the above provisions of the Act read with the scheme was substantiated and the bank monetary penalty is required to be imposed. 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.
