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The Reserve Bank of India (RBI) has, by an order dated September 29, 2022, imposed a financial penalty of ₹20.00 lakh (Rupees Twenty lakh solely) on Vasai Vikas Sahakari Bank Ltd., Vasai, Maharashtra (the financial institution) for non-compliance with RBI instructions on ‘Frauds monitoring and reporting mechanism’. This penalty has been imposed in train of powers vested in RBI conferred beneath 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 supposed 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 performed by RBI close to 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 had reported frauds with delay. 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 acknowledged therein. After contemplating the financial institution’s reply to the discover and extra submissions made by it, 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) Press Release: 2022-2023/987 |
