The Reserve Bank of India has imposed, by an order dated March 01, 2023, a monetary penalty of Rs 3.00 lakh on The Nakodar Hindu Urban Cooperative Bank Ltd, Nakodar.
The UCB was faulted for contravention of Section 35A and Section 36 (1) read with Section 56 of the Banking Regulation Act, 1949.
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, says RBI.
The compliance on review report of Supervisory Action Framework (SAF) dated July 26, 2021, submitted by the bank revealed, inter alia, that it had offered interest rates on deposits for various durations higher than that offered by SBI in non-compliance with the SAF directions.
Based on 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 contravention of the specific directions issued by RBI.