RBI fines Pune People's Co-operative Bank Limited for non-compliance with directions

The Reserve Bank of India stated on Monday that it has imposed a monetary penalty of Rs 2 lakh on Pune People's Co-operative Bank Limited, Pune for non-compliance with directions issued by RBI on 'Know Your Customers'. The order was issued on December 2, 2021, noted the bank in an official notification,

The central bank has said that the monetary penalty has been imposed in "exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI"

"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," wrote RBI in the official notification.

RBI explained that an inspection report of Pune People's Co-operative Bank Limited, based on its financial position as of March 31, 2020, revealed, among other things, non-compliance with directions issued by RBI on 'Know Your Customers'.

Based on the report, RBI issued a notice to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the aforesaid directions as stated therein.

The central bank noted that after considering Pune People's Co-operative Bank Limited's written reply to the show cause notice and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.

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