The Reserve Bank of India has imposed a monetary penalty of Rs 6.00 lakh on the Bijnor Urban Co-operative Bank Limited for contravention of ‘Guarantees, co-acceptances and letters of credit’.
This penalty 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, clarifies RBI.
The inspection report of the bank based on its financial position as on March 31, 2019, revealed, inter alia, that the bank failed to adhere to the provisions related to prohibition on director related loans and issue of performance guarantee.
In another case the Reserve Bank of India (RBl) has imposed, by an order dated June 14, 2021, a monetary penalty of ?5.00 lakh (Rupees Five Lakh only) on the National Urban Co-operative Bank Limited, New Delhi.
The UCB failed to adhere to specific directions issued to it by RBI under Supervisory Action Framework (SAF). This penalty has been imposed in exercise of powers vested in RBI.
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 inspection report of the bank based on its financial position as on March 31, 2019, revealed, inter alia, non-adherence/violation of specific directions issued to the bank by RBI under Supervisory Action Framework (SAF). Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for violation of the said directions.
After considering the bank’s reply, RBI came to the conclusion that the aforesaid charge of non-adherence/violation of RBI directions was substantiated and warranted imposition of monetary penalty..