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The Reserve Bank of India (RBI) has imposed, by an order dated September 22, 2022, a financial penalty of ₹4.00 lakh (Rupees 4 lakh solely) on Bhatpara-Naihati Cooperative Bank Ltd., North 24 Parganas, West Bengal (the financial institution) for contravention of/ non-adherence with the instructions issued by RBI to Urban Cooperative Bank on (i) “Exposure Norms and Statutory / Other Restrictions – UCBs” and (ii) “Management of Advances – UCBs”. This penalty has been imposed in train of powers vested in RBI below the provisions of Section 47 A (1) (c) learn with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, considering 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 inspection experiences of the financial institution based mostly on its monetary positions as on March 31, 2019 and March 31, 2020, revealed, inter alia, that the financial institution had not complied with the instructions on (i) prudential inter-financial institution publicity each on the gross and counter get together stage and (ii) sanction of gold loans. Based on the identical, a Notice was issued to the financial institution advising it to point out trigger as to why penalty shouldn’t be imposed for non-compliance with the instructions. After contemplating the financial institution’s reply, extra submissions made thereof and oral and written submissions made by it throughout Personal Hearing, RBI got here to the conclusion that the aforementioned expenses of non-compliance with RBI instructions have been substantiated and warranted imposition of financial penalty. (Yogesh Dayal) Press Release: 2022-2023/938 |
