RBI slaps Rs 2 cr penalty on RBL Bank for violation of banking rules – check details
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” RBI release said
Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2 cr on RBL Bank Limited after finding it in violation of the banking rules. The penalty was imposed by the banking watchdog via an order passed on 27 September, an RBI release said.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the RBI release said.
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The regulator found RBL Bank in “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),” the order further said.
“For the non-compliance with the provisions of section 10 A (2) (b) of the Act, penalty is also imposed for the period during which the contravention or default continued,” it further said.
The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2019 (ISE 2019).
The examination of the Risk Assessment Report and Inspection Report pertaining to ISE 2019, revealed contravention of the regulatory directions and non-compliance with the provisions of the Act, to the extent of opening of five savings deposit accounts in the name of a co-operative bank and failure to comply with the provisions of section 10A(2)(b) of the Act relating to composition of Board of Directors, the release further said.
RBI issued a notice to the ban seeking its reply over it and asked why a penalty should not be imposed for contravention and non-compliance.
The decision of imposing a fine was taken 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, the RBI release said.
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