Reserve Financial institution of India (RBI) on Thursday stated it has imposed a penalty of Rs 1 crore on Cooperative Rabobank U.A. for deficiencies in regulatory compliances. The penalty has been imposed for contravention of sure provisions of the Banking Regulation Act, 1949 and instructions associated with ‘switch to order funds’.
RBI stated it carried out a statutory Inspection for Supervisory Analysis (ISE) of the financial institution close to the financial institution’s monetary place as of March 31, 2020.
Examination of the chance evaluation report pertaining to the identical revealed contravention of the provisions of the Banking Regulation Act and the instructions issued by RBI. A present trigger discover was issued to the financial institution.
“After contemplating the financial institution’s reply to the discovery, the oral submission made throughout the private listening to and examination of extra submissions made by the financial institution, RBI got here to the conclusion that the cost of contravention of… provisions of the Act and RBI instructions was substantiated and warranted imposition of financial penalty on the financial institution,” RBI stated in a press release.
In one other assertion, RBI stated a penalty of Rs 5 lakh has been imposed on Village Monetary Providers Ltd, Kolkata, for non-compliance with sure provisions of the Know Your Buyer Instructions, 2016.
The central financial institution, nevertheless, stated the penalties are primarily based on the deficiencies in regulatory compliance and aren’t meant to pronounce upon the validity of any transaction or settlement entered into by the banks with their clients.
On Wednesday, RBI imposed penalties on two cooperative banks for deficiencies in regulatory compliances.
It imposed a penalty of Rs 13 lakh on Ahmednagar Product owner’s Cooperative Financial institution, Ahmednagar, Maharashtra, and Rs 2 lakh on The Mahila Vikas Co-operative Financial institution, Ahmedabad, Gujarat.