RBI has imposed a monetary penalty of Rs 2.00 lakh on the Urban Co-operative Bank Ltd., Budaun for contravention of sub-section (1) of Section 36 and Section 35 A read with Section 56 of the Banking Regulation Act, 1949.
The inspection report of the bank based on its financial position as on March 31, 2020, revealed as the bank had failed to adhere to the RBI directions issued under Supervisory Action Framework (SAF) and the RBI directions on Frauds-classification and reporting.
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 contravention of RBI directions and the said sections of the Banking Regulation Act, 1949.
After considering the bank’s reply and oral submission made during the personal hearing, RBI came to the conclusion that the aforesaid charges are valid
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 release on the issue.