RBI imposes monetary penalty on The Mahabaleshwar Urban Cooperative Bank Limited, Mahabaleshwar, Maharashtra - ਆਰਬੀਆਈ - Reserve Bank of India
RBI imposes monetary penalty on The Mahabaleshwar Urban Cooperative Bank Limited, Mahabaleshwar, Maharashtra
The Reserve Bank of India (RBI) has imposed, by an order dated July 28, 2021, a monetary penalty of ₹1 lakh (Rupees One lakh only) on The Mahabaleshwar Urban Cooperative Bank Limited, Mahabaleshwar (the bank) for contravention of the directions issued by RBI on Board of Directors - UCBs. 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 directions issued by RBI. The 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 inspection report of the bank based on its financial position as on March 31, 2019, revealed, inter alia, that the bank had sanctioned credit facility to the relative of expert director in contravention of the directions issued by RBI on Board of Directors - UCBs. 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 aforesaid directions. After considering the bank’s reply to the Notice and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty. (Yogesh Dayal) Press Release: 2021-2022/600 |