Reserve Bank of India – Press Releases

The Reserve Bank of India (RBI) has, by an order dated September 27, 2022, imposed a financial penalty of ₹18.50 lakh (Rupees Eighteen Lakh Fifty Thousand solely) on Nagpur Nagarik Sahakari Bank Ltd., Nagpur (the financial institution) for non-compliance with RBI instructions on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. This penalty has been imposed in train of powers vested in RBI conferred below part 47 A (1) (c) learn with sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949 (BR Act).

This motion relies on deficiency 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 statutory inspection of the financial institution carried out by RBI on the subject of its monetary place as on March 31, 2020, and examination of the Risk Assessment Report and all associated correspondence pertaining to the identical, revealed, inter alia, that the financial institution, regardless of being ineligible, had accepted mounted deposits from different Urban Co-operative Banks. In furtherance to the identical, a discover 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 RBI instructions, as said therein.

After contemplating the financial institution’s reply to the discover, extra submissions made by it and oral submissions made throughout the private listening to, RBI got here to the conclusion that the cost of non-compliance with the aforesaid RBI instructions was substantiated and warranted imposition of financial penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/989