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The Reserve Bank of India (RBI) has imposed, by an order dated October 20, 2022, a financial penalty of ₹5.00 lakh (Rupees Five lakh solely) on The Mysore Merchants Co-operative Bank Ltd., Mysore, Karnataka (the financial institution) for non-adherence / violation of instructions issued underneath Management of Advances-UCBs. 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 (AACS), bearing in mind 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 report of the financial institution based mostly on its monetary place as on March 31, 2020, revealed, inter alia, situations of sanction of gold loans in breach of the cap underneath bullet compensation scheme. 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 and oral submissions through the private listening to, RBI got here to the conclusion that the aforesaid cost of non-compliance with RBI instructions was substantiated and warranted imposition of financial penalty. (Yogesh Dayal) Press Release: 2022-2023/1124 |
