The Reserve Bank of India (RBI) on Monday imposed a effective of Rs 2 crore on personal financial institution RBL Bank for not complying with the principles of the Regulatory Compliance and Banking Regulation Act.
Following the supervisory analysis of RBL Bank, the RBI has issued notices concerning violation of sure regulatory compliances and non-compliance with the provisions of the Banking Regulation Act concerning opening of financial savings accounts within the title of a co-operative financial institution and composition of the Board of Directors.
RBI has issued a discover to the financial institution asking it to indicate explanation why a penalty shouldn’t be imposed on it for violation and non-compliance with its instructions and provisions of the Banking Regulation Act.
The apex financial institution mentioned that after contemplating the reply of the financial institution to the present trigger discover, the presentation made in the course of the private listening to and examination of the extra submissions made by the financial institution, RBI has come to the conclusion that the cost of contravention/non-compliance have been substantiated and warranted imposition of financial penalty on the financial institution.
RBI additional mentioned that this motion has been taken on account of a discount in regulatory compliances. It has no intention of adjudicating on the validity of any transaction or settlement entered into by the Bank for its clients.
“This motion is predicated 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,” RBI mentioned.
In one other assertion, RBI mentioned that a effective of Rs 11 lakh has been imposed on Jammu and Kashmir State Co-operative Bank Limited, Srinagar for violation of sure sections of the Banking Regulation Act, 1949.
The statutory inspection of the financial institution was achieved by NABARD with reference to the monetary place of the financial institution as on 31 March 2019.
During the inspection, violation of Section 23 in addition to Section 56 of the Banking Regulation Act, 1949 was detected because the Bank had opened its branches with out prior approval of RBI.