New Delhi: The Reserve Bank of India (RBI) has based on deficiencies in regulatory compliance imposed a monetary penalty of Rs 2 crore on RBL Bank Limited.
The RBI said this “action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers”.
The monetary penalty has been imposed for contravention of section 28 (h) of the Reserve Bank of India (Interest Rate on Deposits) Directions, 2016, and for non-compliance with the provisions of clause (b) of sub-section (2) of section 10A of the Banking Regulation Act, 1949 (the Act), said the RBI order dated September 27.
The penalty is also imposed for the period during which the contravention or default continued for the non-compliance with the provisions of section 10 A (2) (b) of the Act.
The RBI, which conducted the Statutory Inspection for Supervisory Evaluation (ISE) of the bank with reference to its financial position as on March 31, 2019 (ISE 2019), has imposed this penalty in exercise of powers vested under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Act.
The examination of the Risk Assessment Report and Inspection Report pertaining to ISE 2019, the RBI letter dated October 27, 2020, and related correspondence in the matter, revealed, inter alia, contravention of the regulatory directions and non-compliance with the provisions of the Act, to the extent of (i) opening of five savings deposit accounts in the name of a co-operative bank and (ii) failure to comply with the provisions of section 10A(2)(b) of the Act relating to composition of Board of Directors.
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In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of / non-compliance with the provisions of the directions/Act, as stated therein, the RBI release added.
The RBI after considering the bank’s reply to the show cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank came to the conclusion that the aforesaid charge of contravention of / non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank.