The Reserve Bank of India (RBI) has imposed, by an order dated September 15, 2023, a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on The Jawhar Urban Co-operative Bank Limited, Palghar, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has, by an orThe Reserve Bank of India (RBI) has, by an order dated October 10, 2023 imposed a monetary penalty of ₹5.39 Crore (Rupees Five Crore and Thirty Nine Lakh only) on Paytm Payments Bank Limited (the bank) for non-compliance with certain provisions of the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’, ‘RBI Guidelines for Licensing of Payments Banks’ read with ‘Enhancement of maximum balance at end of the day’, ‘Cyber security framework in banks’ read with ‘Guidelines on reporting of unusual cyber security incidents’ and ‘Securing mobile banking applications including UPI ecosystem’. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
 

The Reserve Bank of India (RBI) has, by an order dated September 28, 2023, imposed a monetary penalty of ₹4.50 lakh (Rupees Four lakh Fifty thousand only) on The Kalyan Janata Sahakari Bank Limited, Kalyan, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Interest Rates on Deposits’ and ‘Maintenance of Deposit Accounts’. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

This action is based on deficiency 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.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2021, and examination of the Risk Assessment Report, Inspection Report and all related correspondence pertaining to the same, revealed, inter alia, that the bank had (i) opened Savings Bank (SB) accounts of ineligible institutions, and (ii) levied charges for non-maintenance of minimum balances in SB accounts without notifying the customers. Consequently, 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 RBI directions, as stated therein.

After considering the bank’s reply to the notice, its additional submissions and the 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 and warranted imposition of monetary penalty.

(Yogesh Dayal)      
Chief General Manager

Press Release: 2023-2024/1074

The Reserve Bank of India (RBI) has, by an order dated September 15, 2023, imposed a monetary penalty of ₹1.20 lakh (Rupees One lakh twenty thousand only) on Finquest Financial Solutions Private Limited, Mumbai (the company) for non-compliance with the directions issued by RBI on ‘Know Your Customer (KYC) Directions, 2016’ and ‘Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.

The Reserve Bank of India (RBI) has imposed, by an order dated September 15, 2023, a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on The Jawhar Urban Co-operative Bank Limited, Palghar, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Know Your Customer (KYC)’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Reserve Bank of India (RBI) has, by an order dated September 28, 2023, imposed a monetary penalty of ₹4.50 lakh (Rupees Four lakh Fifty thousand only) on The Kalyan Janata Sahakari Bank Limited, Kalyan, Maharashtra (the bank) for non-compliance with the directions issued by RBI on ‘Interest Rates on Deposits’ and ‘Maintenance of Deposit Accounts’. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

This action is based on deficiency 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.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2021, and examination of the Risk Assessment Report, Inspection Report and all related correspondence pertaining to the same, revealed, inter alia, that the bank had (i) opened Savings Bank (SB) accounts of ineligible institutions, and (ii) levied charges for non-maintenance of minimum balances in SB accounts without notifying the customers. Consequently, 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 RBI directions, as stated therein.

After considering the bank’s reply to the notice, its additional submissions and the 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 and warranted imposition of monetary penalty.

(Yogesh Dayal)      
Chief General Manager

Press Release: 2023-2024/1074

The Reserve Bank of India (RBI) has, by an order dated September 14, 2023 imposed a monetary penalty of ₹3.00 lakh (Rupees Three lakh only) on The Gadhinglaj Urban Co-operative Bank Ltd., Gadhinglaj (the bank) for contravention of Section 26A read with Section 56 of the Banking Regulation Act,1949 (BR Act) and Know Your Customer Directions issued by RBI. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.

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.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and all correspondence related thereto, revealed, inter alia, that the bank (i) did not transfer eligible amounts to Depositor Education and Awareness Fund, and (ii) allotted multiple UCICs to its customers. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the direction, as stated therein.

After considering the bank’s reply to the notice, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2023-2024/1076

The Reserve Bank of India (RBI) has, by an order dated September 14, 2023, imposed a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on Rahimatpur Sahakari Bank Ltd., Rahimatpur, Dist. Satara, (the bank) for non-compliance with the directions issued by RBI on ‘Maintenance of Deposit Accounts- Primary (Urban) Co-operative Banks’. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

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.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and all correspondence related thereto, revealed, inter alia, that the bank had not conducted annual review of inoperative accounts. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions, as stated therein.

After considering the bank’s reply to the notice and the oral submissions made by it during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)      
Chief General Manager

Press Release: 2023-2024/1075

The Reserve Bank of India (RBI) has imposed, by an order dated September 15, 2023, a monetary penalty of ₹6.00 lakh (Rupees Six lakh only) on The Sahayadri Sahakari Bank Limited, Mumbai (the bank) for contravention of Section 26A read with Section 56 of the Banking Regulation Act, 1949 (BR Act), specific directions issued by RBI under the Supervisory Action Framework (SAF), and non-compliance with the RBI Directions on ‘Know Your Customer (KYC)’ and ‘Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks’. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.

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.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank (i) had not transferred eligible amounts to Depositor Education and Awareness Fund (DEA Fund), (ii) had offered interest rates on deposits at rate more than those offered by the State Bank of India in violation of specific directions issued under the SAF, (iii) had not put in place a system for periodic updation of KYC of its customers, (iv) had not conducted annual review of inoperative/dormant accounts, and (v) had not conducted periodic review of risk categorisation of its high-risk customers. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the directions, as stated therein.

After considering the bank’s reply to the notice, RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)      
Chief General Manager

Press Release: 2023-2024/1077

The Reserve Bank of India (RBI) has, by an order dated September 28, 2023, imposed a monetary penalty of ₹13 lakh (Rupees Thirteen lakh only) on SBPP Co-operative Bank Limited, Killa Pardi, Gujarat (the bank) for non-compliance with directions issued by RBI on ‘Interest Rate on Deposits’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

This action is based on deficiency 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.

Background

The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2021, and examination of the Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had opened savings deposit accounts of trusts, whose entire income was not exempt from payment of income-tax under the Income Tax Act, 1961. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the RBI directions, as stated therein.

After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.

(Yogesh Dayal)      
Chief General Manager

Press Release: 2023-2024/1078