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The Reserve Bank of India (RBI) has imposed, by an order dated September 13, 2022, a financial penalty of ₹1.50 lakh (Rupees One lakh and Fifty Thousand solely) on Dr. Ambedkar Nagarik Sahakari Bank Maryadit, Gwalior (M.P) (the financial institution) for contravention of/ non-compliance with the instructions issued by the RBI to Urban Co-operative Banks on Exposure Norms & Statutory/ Other Restrictions and Know Your Customer (KYC). This penalty has been imposed in train of powers vested in RBI underneath the provisions of Section 47 A (1) (c) learn with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into consideration the failure of the financial institution to stick to the aforesaid instructions issued by RBI. This motion relies on deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its clients. Background The Risk Assessment Report of the financial institution primarily based on its monetary place as on March 31, 2021, revealed, inter alia, that the financial institution had (i) not complied with the prudential inter-financial institution gross publicity restrict, (ii) exceeded the prudential inter-financial institution counter celebration publicity restrict, and (iii) not ensured periodic evaluation of danger categorization of its clients, in contravention of/ non-compliance with the aforesaid instructions issued by RBI. Based on the identical, a Notice was issued to the financial institution advising it to indicate trigger as to why penalty shouldn’t be imposed on it for non-compliance with the instructions. After contemplating the financial institution’s replies and oral submissions made throughout private listening to, RBI got here to the conclusion that the aforesaid fees of non-compliance with RBI instructions had been substantiated and warranted imposition of financial penalty. (Yogesh Dayal) Press Release: 2022-2023/888 |
