Reserve Bank of India – Press Releases

The Reserve Bank of India (RBI) has, by an order dated August 29, 2022, imposed a financial penalty of ₹25.00 lakh (Rupees Twenty-Five Lakh solely) on The Karnataka State Co-operative Apex Bank Ltd., Bengaluru (the financial institution) for non-compliance with instructions issued by the Reserve Bank of India (RBI) on “Housing Finance”. 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.

This motion is predicated on deficiencies 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 prospects.

Background

The statutory inspection of the financial institution performed by NABARD just about the financial institution’s monetary place as on March 31, 2019, the Inspection Report pertaining thereto and examination of all associated correspondence revealed, inter alia, that the financial institution did not abide by the RBI instructions limiting the quantum of housing mortgage that may be granted to a person borrower by a State co-operative financial institution. In furtherance to the identical, a discover was issued to the financial institution advising it to indicate trigger as to why penalty shouldn’t be imposed on it for non-compliance with the aforesaid instructions issued by RBI.

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

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/821