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The Reserve Bank of India (RBl) has imposed, by an order dated November 11, 2022, a financial penalty of ₹1.00 lakh (Rupees One lakh solely) on Jila Sahakari Kendriya Bank Maryadit, Balaghat (M.P) (the financial institution) for contravention of/ non-compliance with the provisions of the Banking Regulation Act, 1949 (the Act) and instructions issued by NABARD on ‘Frauds – Guidelines for Classification, Reporting and Monitoring’. 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, considering the failure of the financial institution to stick to the aforesaid instructions issued. 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 based mostly on its monetary place as on March 31, 2020, revealed, inter alia, that the financial institution had (i) delayed submission of OSS returns to NABARD and (ii) had reported frauds to NABARD with delay in contravention of/ non-compliance with the provisions of the Act and aforesaid instructions issued by NABARD. 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 replies and oral submissions made through the private listening to, RBI got here to the conclusion that the aforesaid fees of non-compliance with the provisions of the Act and NABARD instructions have been substantiated and warranted imposition of financial penalty. (Yogesh Dayal) Press Release: 2022-2023/1199 |
