The Reserve Bank of India has imposed a monetary penalty of Rs 5.00 lakh on The Bharat Co-operative Bank Limited, Bengaluru, Karnataka. The UCB was faulted for non-adherence / violation of directions issued under Exposure Norms and Statutory / Other Restrictions – UCBs.
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 inspection reports of the bank based on its financial position as on March 31, 2020 and March 31, 2021, revealed, inter alia, that the bank’s investment in commercial paper breached the prudential individual exposure limit of 15% of capital funds. 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 non-compliance with the directions.
After considering the bank’s reply and oral submissions during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.