Mumbai (Maharashtra) [India], December 5 (ANI): The Reserve Bank of India (RBI) on Monday imposed a monetary penalty of Rs 5 lakh on the Bharat Co-operative Bank, Bengaluru, for violations of directions of the central bank.
The penalty was slapped on the non-adherence, violation of directions issued under exposure norms and statutory or other restrictions - urban cooperative banks, the central bank said.
This penalty has been imposed in the exercise of powers vested in RBI under the provisions of the Banking Regulation Act, 1949 (AACS).
The RBI in a statement said this action was 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 inspection reports of the bank based on its financial position as on March 31, 2020 and March 31, 2021, revealed that the bank's investment in commercial paper breached the prudential individual exposure limit of 15 per cent of capital funds, according to the RBI statement. 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 non-compliance with the directions.
After considering the bank's reply and oral submissions during the personal hearing, the central said in a statement it came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted the imposition of monetary penalty. (ANI)