On Wednesday, the Reserve Bank of India (RBI) imposed a monetary penalty of Rs 1 crore on Reliance Jio Payments Bank Limited for non-compliance with the central bank's directions on timely submission of application in the case of re-appointment of Managing Director and Chief Executive Officer (MD & CEO) under Section 35B of the Banking Regulation Act, 1949 (the Act).
"This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1)(c) read with section 46(4)(i) of the Act," said RBI in a statement.
RBI further said that the penalty was imposed based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
As per RBI guidelines, Jio Payments Bank was required to submit an application under Section 35B of the Act in the case of reappointment of MD & CEO of the bank four months prior to the date on which the term of the current position holders was to expire. However, RBI said that the bank submitted the said application less than a month prior to that date.
A notice was issued to the bank advising it to show cause as to why penalty should not be imposed for its failure to comply with the directions issued by RBI.
"After considering the bank's reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI concluded that the aforesaid charge of non-compliance with RBI directions was established and warranted imposition of monetary penalty," the central bank said in a statement.