Reserve Bank of India – Press Releases

The Reserve Bank of India (RBI) has imposed, by an order dated September 22, 2022, a financial penalty of ₹10,000 (Rupees Ten thousand solely) on Budge Budge Nangi Cooperative Bank Ltd., Budge Budge, West Bengal (the financial institution) for contravention of/ non-compliance with the instructions issued by RBI to Urban Cooperative Banks on “Exposure Norms and Statutory / Other Restrictions – 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, making an allowance for 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 supposed to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its prospects.

Background

The inspection stories of the financial institution based mostly on its monetary place as on March 31, 2020 and March 31, 2021, revealed, inter alia, that the financial institution had not complied with the instructions on prudential inter-financial institution publicity restrict, each on the gross in addition to counter occasion degree. 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 to the discover and oral submissions made through the private listening to, RBI got here to the conclusion that the costs of non-compliance with the aforementioned RBI instructions have been substantiated and warranted imposition of financial penalty, to the extent of non-compliance with such instructions.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/939