Reserve Bank of India (RBI) on Thursday said it has imposed a penalty of Rs 1 crore on Cooperatieve Rabobank U.A. for deficiencies in regulatory compliances. The penalty has been imposed for contravention of certain provisions of the Banking Regulation Act, 1949 and directions related to ‘transfer to reserve funds’.
RBI said it conducted a statutory Inspection for Supervisory Evaluation (ISE) of the bank with reference to the bank’s financial position as on March 31, 2020.
Examination of the risk assessment report pertaining to the same revealed contravention of the provisions of the Banking Regulation Act and the directions issued by RBI. A show cause notice was issued to the bank.
“After considering the bank’s reply to the notice, oral submission made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the charge of contravention of… provisions of the Act and RBI directions was substantiated and warranted imposition of monetary penalty on the bank,” RBI said in a statement.
In another statement, RBI said a penalty of Rs 5 lakh has been imposed on Village Financial Services Ltd, Kolkata, for non-compliance with certain provisions of the Know Your Customer Directions, 2016.
The central bank, however, said the penalties are based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.
On Wednesday, RBI imposed penalties on two co-operative banks for deficiencies in regulatory compliances.
It imposed a penalty of Rs 13 lakh on Ahmednagar Merchant’s Cooperatieve Bank, Ahmednagar, Maharashtra, and Rs 2 lakh on The Mahila Vikas Co-operative Bank, Ahmedabad, Gujarat.