The Reserve Bank of India imposed a fine of Rs 4 lakh on the Bicholim Urban Co-operative Bank in Goa. The cooperative bank was penalized for failing to adhere to RBI guidelines on exposure standards.
“This sanction was imposed in the exercise of the powers conferred on RBI under the provisions of Article 47 A (1) (c) read with Article 46 (4) (i) and Article 56 of the Banking Regulation Act, 1949 (the Act), in view of the bank’s failure to comply with the aforementioned instructions issued by RBI, ”he said.
The action, the RBI said, is not intended to rule on the validity of any transaction or agreement entered into by the bank with its customers.
The RBI imposed the sanction following an inspection report based on its financial situation as of March 31, 2020. The report concluded that the bank was not complying with the RBI’s instructions. He then sent a show cause notice to the bank asking why a penalty should not be imposed.
The umbrella bank said the sanction was imposed on the basis of the bank’s written response and oral submissions made during the personal hearing and subsequent additional submissions. “RBI came to the conclusion that the above charges of failing to follow RBI’s instructions were founded and warranted the imposition of a monetary penalty,” he said.
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