The Reserve Bank of India has imposed, by an order dated December 23, 2021, a monetary penalty of Rs 30 Lakh on MUFG Bank for non-compliance with the directions issued by RBI on “Loans and Advances – Statutory and Other Restrictions”.
Two more UCBs which were penalized by the RBI last week are Mumbai based Dattatraya Maharaj Kalambe Jaoli Sahakari Bank and Ratanagiri based Chiplun Urban Co-operative Bank.
On MUFG Bank, RBI says “This action is based on the 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 Statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI and the examination of the Risk Assessment Report, Inspection Report and all related correspondence pertaining to the same, revealed, inter alia, non-compliance with the aforesaid direction to the extent that the bank had sanctioned loans and advances to companies whose board of directors included person(s) who were director(s) on boards of other banks, without such sanctions being accorded at the level of its Management Committee.
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 on it for non-compliance with the RBI direction, as stated therein.
After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI direction was substantiated and warranted imposition of monetary penalty.
Dattatraya Maharaj Kalambe Jaoli Sahakari Bank was fined a monetary penalty of Rs 1 lakh for contravention of the directions issued by RBI on Exposure Norms and Statutory / Other Restrictions – UCBs.
The Reserve Bank of India imposed a monetary penalty of Rs 2 lakh on the third UCB namely Chiplun Urban Co-operative Bank Ltd., Ratnagiri for contravention of the directions issued by RBI on Exposure Norms and Statutory / Other Restrictions – UCBs.