RBI imposes Rs 2 crore penalty on RBL Bank for non-compliance with Banking Regulation Act

The Reserve Bank of India on Monday imposed a monetary penalty of Rs 2 crore on private lender RBL Bank for contravention of certain regulatory directions and non-compliance with the provisions of the Banking Regulation Act. Following a supervisory evaluation of the RBL Bank, the private bank was found to be non-compliant with provisions of clause (b) of sub-section (2) of section 10A of the Banking Regulation Act, 1949, RBI said in a release.

The regulatory body decided to place a fine after the private bank was found to breach certain regulatory directions and non-compliance with the provisions of the Banking Regulation Act concerning the opening of five savings accounts in the name of a cooperative bank and composition of the board of directors. The RBI issued a notice to the bank advising it to show cause against the penalty. It has also sought an explanation regarding the non-compliance of regulations.

"After considering the bank's reply to the show-cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of contravention of/non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank," the RBI said in its statement. The central bank further informed that the action was based on deficiencies in regulatory compliance and would not affect the validity of any transaction or agreement entered into by the bank with its customers.

J&K Co-operative bank fined Rs 11 lakh by RBI

Furthermore, the RBI informed that it has now imposed a penalty of Rs 11 lakh on The Jammu & Kashmir State Co-operative Bank Limited, Srinagar for ignoring certain rules of the Banking Regulation Act, 1949. The statutory inspection of the bank was conducted by NABARD. The inspection was held in reference to the bank's financial position as of March 31, 2019. Following the inspection, the bank was revealed that the bank had opened branches without obtaining the prior permission of the RBI. The Central bank informed that the penalty was based on deficiencies in regulatory compliance and would not affect the validity of any transaction or agreement between the bank and its customers.

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