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The Reserve Bank of India (RBI) has imposed, by an order dated November 10, 2022, a financial penalty of ₹3.10 lakh (Rupees Three lakh and Ten thousand solely) on The Berhampur Cooperative Urban Bank Ltd. (the financial institution) for contravention of/ non-compliance with the instructions issued by Reserve Bank of India (RBI) on (i) Exposure Norms and Statutory/Other Restrictions-UCBs (ii) sure provisions of the Reserve Bank of India – (Know Your Customer (KYC) Direction, 2016 and (iii) Depositor Education and Awareness Fund. This penalty has been imposed in train of powers vested in RBI beneath 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 clients. Background The inspection report of the financial institution primarily based on its monetary place as on March 31, 2020 and a scrutiny of the information of the financial institution revealed, inter alia, that the financial institution had did not (i) adjust to the RBI instructions on prudential inter-financial institution (gross) publicity norms and prudential inter-financial institution counter-get together restrict (ii) allot Unique Customer Identification Codes (UCIC) to its particular person clients and (iii) submit right certificates concerning switch to the Depositor Education and Awareness Fund. 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 extra submissions made by it, RBI got here to the conclusion that the aforementioned prices of non-compliance with RBI instructions have been substantiated and warranted imposition of financial penalty. (Yogesh Dayal) Press Release: 2022-2023/1196 |
