The Reserve Bank of India (RBI) on Monday imposed a monetary penalty of Rs 30 lakh on Janata Sahakari Bank Ltd., Pune for non-compliance with certain directions issued by the central bank.
The penalty was imposed for non-compliance with specific directions dated March 06, 2018 issued by the RBI under the Supervisory Action Framework (SAF) and RBI directions on ‘Frauds in UCBs: Changes in Monitoring and Reporting mechanism’.
The statutory inspection of the bank conducted by the RBI with reference to the bank’s financial position as on March 31, 2019, the Inspection Report and examination of all related correspondence revealed that the bank had not complied with the directions on exposure to sensitive sectors (real estate) and classification and reporting of frauds, RBI said in a release.
Following this, RBI had issued a notice to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with RBI directions.
“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with the aforesaid directions,” the release said.
The penalty has been imposed in exercise of powers vested in RBI under the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the directions.
The action is based on failure in regulatory compliance and is not intended to comment on the validity of any transaction or agreement entered into by the bank with its customers, the central bank clarified.
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