The Reserve Bank of India (RBI) on Monday imposed a penalty of Rs 2 crore on RBL Bank for non-compliance with provisions of the Banking Regulation Act, 1949.
The central bank said it had conducted statutory Inspection for Supervisory Evaluation (ISE) of the bank with reference to its financial position as on March 31, 2019 (ISE 2019).
RBI said the examination of the bank's Risk Assessment Report and ISE 2019 revealed contravention of regulatory directions and non-compliance with the provisions of Banking Regulation Act, 1949 by the bank in its opening of five savings deposit accounts in the name of a co-operative bank and failure to comply with the provisions of section 10A(2)(b) of the Act relating to composition of board of directors.
Accordingly, the RBI issued a notice to the bank advising it to show cause as to why penalty should not be imposed for contravention of and non-compliance with the provisions of the Act.
"After considering the bank's reply to the show cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of contravention of/ non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank," it said in a release.
For the non-compliance with the provisions of section 10 A (2) (b) of the Banking Regulation Act, the penalty is also imposed for the period during which the contravention or default continued, it added.
RBI said the penalty has been imposed in exercise of powers vested in it under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Act.
"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," the central bank said.
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