The Reserve Bank of India (RBI) on Tuesday imposed monetary penalties totalling ₹11 lakh on Bijnor Urban Co-operative Bank Limited, Bijnor and National Urban Co-operative Bank Limited, New Delhi for contravention of certain norms.
A fine of ₹6 lakh has been imposed on the Bijnor Urban Co-operative Bank Limited, and ₹5 lakh on the National Urban Co-operative Bank Limited, New Delhi.
The RBl has imposed a monetary penalty of ₹6 lakh on the Bijnor Urban Co-operative Bank Limited, Bijnor for contravention of sections 20 and 35A read with section 56 of the Banking Regulation Act, 1949 and regulations on ‘Guarantees, co-acceptances and letters of credit’, the RBI said in a statement.
This 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 provisions of the Act and directions issued thereunder by RBI, it added.
The inspection report of the Bijnor Urban Co-operative Bank based on its financial position as on March 31, 2019, revealed, inter alia, that the bank failed to adhere to the provisions related to the prohibition on director-related loans and issue of performance guarantee, the central bank said.
In another statement, it said the inspection report of the National Urban Co-operative Bank based on its financial position as on March 31, 2019, revealed, inter alia, non-adherence/violation of specific directions issued to the bank by RBI under Supervisory Action Framework (SAF).
RBI further said penalties have been imposed based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered by the two lenders with their customers.
“After considering the bank’s reply, RBI came to the conclusion that the aforesaid charge of non-adherence/violation of RBI directions was substantiated and warranted imposition of monetary penalty,” it added.