The Reserve Bank of India (RBI) has announced a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on The National Cooperative Bank Ltd., Mumbai for contravention of RBI’s directions concerning Maintenance of Deposit Accounts. The penalty has been instituted in line with the powers given to RBI under Section 47 A (1) (c), Section 46 (4) (i), and Section 56 of the Banking Regulation Act, 1949.
Deficiencies in Regulatory Compliance
The action was taken based on the bank’s failure to adhere to RBI’s directions and stems from deficiencies in regulatory compliance. The penalty is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background and Findings
RBI conducted a statutory inspection of the bank referencing its financial position as of March 31, 2021. The examination of the Risk Assessment Report and all related correspondence revealed that the bank was collecting fixed penal charges for shortfall in maintenance of minimum balance in saving bank accounts. The charges were not proportionate to the extent of the shortfall and were imposed without giving proper notice to customers.
Upon discovery, a notice was issued to the bank, asking it to show cause as to why penalty should not be imposed for the contravention of RBI’s directions. After considering the bank’s written reply, RBI determined that the charge of non-compliance was substantiated, necessitating the imposition of the monetary penalty.
- RBI has imposed a monetary penalty of ₹1.00 lakh on The National Cooperative Bank Ltd., Mumbai for contravention of directions concerning Maintenance of Deposit Accounts.
- The action was taken due to the bank’s failure to adhere to the RBI’s directions and due to deficiencies in regulatory compliance.
- The penalty followed an RBI statutory inspection of the bank’s financial position as of March 31, 2021, which revealed non-compliance with RBI’s directions.