The Reserve Bank of India has imposed a monetary penalty of Rs 25.00 lakh on G S Mahanagar Co-operative Bank Limited, Mumbai, Maharashtra. The bank was fined for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts’.
This action is based on deficiency 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 of the bank conducted by RBI with reference to its financial position as on March 31, 2020, and examination of the Risk Assessment Report and all related correspondence pertaining to the same, revealed, inter alia, that the bank had levied penal charges for non-maintenance of minimum balance in savings bank accounts without notice to the customers and without providing one-month time for restoration of the minimum balance in the accounts.
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 for contravention of the RBI directions, as stated therein.
After considering the bank’s reply to the notice, the additional submissions made by it and the oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.
