E-Paper
RBI imposes penalty of ₹27.5 lakh on Dhanlaxmi Bank, ₹20 lakh on cooperative bank
The central bank, however, clarified that the action should not be seen as a comment on the validity of any transaction or agreement that the two banks may have with their respective customers.
The Reserve Bank of India (RBI) announced on Monday it has imposed fines of ₹27.5 lakh and ₹20 lakh, respectively, on Thrissur-headquartered Dhanlaxmi Bank and Gorakhpur-based NE & EC Railway Employees’ Multi-State Primary Cooperative Bank. Explaining its decision, the central bank said Dhanlaxmi Bank was being penalised for violation of norms related to the “Depositor Education and Awareness Scheme” while the action against NE & EC Cooperative Bank was due to deficiencies in its regulatory compliance.
The RBI issued two separate statements, one for each bank, informing of its decision.
“The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted with reference to its financial position as on March 31, 2020. An examination of the Risk Assessment Report, as well as an Inspection Report, revealed, inter-alia, contravention of the provisions of the Banking Regulation Act, 1949, read with the Depositor Scheme,” the RBI said on Dhanlaxmi Bank, adding that a show-cause notice was issued to the latter seeking explanation on why it should not be penalised for the contravention.
“After considering the reply, as well as oral submissions made during personal hearings, it was concluded that the charge of contravention was substantiated, and called for financial penalty to be levied on the bank,” the central bank further said.
On NE & EC Cooperative Bank, it said action was on the basis of an inspection report of the bank which, it said, revealed non-adherence on specific instructions under the Supervisory Action Framework (SAF). The report was based on the financial position of the bank as on March 31, 2019, the RBI said.
However, the central bank clarified that the fines imposed on the two banks were purely due to deficiencies in regulatory compliance, and should not be seen as a comment on the validity of any transaction or agreement that these may have with their respective customers.
(With agency inputs)
