The Reserve Bank of India (RBI) on Thursday imposed a Rs 1 lakh monetary penalty on The Kurla Nagarik Sahakari Bank, Mumbai for violating certain norms.
The penalty has been imposed on the bank for "contravention of Section 26-A read with section 56 of the Banking Regulation Act, 1949 (the Act), the Depositor Education and Awareness Fund Scheme, 2014 (the Scheme) framed under section 26 A of the Act," noted the RBI in an official statement.
RBI has imposed the penalty under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 (the Act), taking into account the failure of the bank to adhere to the aforesaid directions issued by the central bank.
RBI has explained that its action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by The Kurla Nagarik Sahakari Bank with its customers.
The central bank had stated that an inspection report of The Kurla Nagarik Sahakari Bank based on its financial position as of March 31, 2020, had revealed, among other things, that the bank had not transferred balances, in certain accounts which were unclaimed for more than ten years to Depositor Education and Awareness Fund.
Based on the same, RBI issued a notice to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with and contravention of the provisions of the Act and the directions issued under the Act.
After considering The Kurla Nagarik Sahakari Bank's reply to the notice and 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. The RBI explained that the charge warranted the imposition of a monetary penalty on the Kurla Nagarik Sahakari Bank.
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