Money & Banking

RBI imposes a monetary penalty of ₹2 crore on RBL Bank

Our Bureau Mumbai | Updated on September 27, 2021

The Reserve Bank of India has imposed a monetary penalty of ₹2 crore on RBL Bank.

The penalty, imposed by an order dated September 27, is for contravention of section 28 (h) of the Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 and for non-compliance with the provisions of clause (b) of sub-section (2) of section 10A of the Banking Regulation Act, 1949 and also for non-compliance with the provisions of section 10 A (2) (b) of the Act.

“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) of the Act,” the RBI said on Monday.

The RBI conducted the Statutory Inspection for Supervisory Evaluation of RBL Bank for its financial position on March 31, 2019 (ISE 2019).

The examination of the Risk Assessment Report and Inspection Report pertaining to ISE 2019, RBI letter dated October 27, 2020 and related correspondence revealed contravention of the regulatory directions and non-compliance with the provisions of the Act in terms of 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 the composition of the board of directors.

A notice was then issued to the bank advising it to show cause as to why the penalty should not be imposed for contravention and non-compliance.

“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.

Published on September 27, 2021

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