The Reserve Bank imposed a penalty of Rs 2 crore on private lender RBL Bank for deficiencies in regulatory compliances and non-compliance with the provisions of the Banking Regulation Act.
Following supervisory evaluation of the RBL Bank, the Reserve Bank raised issues relating to the contravention of certain regulatory directions and non-compliance with the provisions of the Banking Regulation Act concerning the opening of five savings accounts in the name of a cooperative bank and composition of the board of directors.
The RBI later issued a notice to the bank advising it to show cause as to why penalty should not be imposed for contravention of and non-compliance with the provisions of its directions and provisions of the Banking Regulation Act.
“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," the RBI said.
The action, the central bank further said, was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
(With inputs from PTI)