The Reserve Bank of India has imposed a monetary penalty of Rs 48.00 lakh on The Kerala State Co-operative Bank Ltd., Thiruvananthapuram.
The co-op bank was faulted for non-compliance with the provisions of section 19 read with section 56 of Banking Regulation Act, 1949 (the Act) and directions issued by RBI on ‘Gold Loan – Bullet Repayment’.
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.
In furtherance to the same, notices were issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of the provisions of the Act and for non-compliance with the directions issued thereunder, as stated therein.
After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid provisions of the Act and RBI directions was substantiated and warranted imposition of monetary penalty.