The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 1 lakh on Priyadarshini Mahila Nagari Sahakari Bank in Maharashtra for failing to follow certain instructions.
"This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI," the central bank said in a statement.
The RBI stated that its action is based on regulatory compliance deficiencies and is not intended to rule on the validity of any transaction or agreement entered into by the bank with its customers.
The bank's inspection report, based on its financial position as of March 31, 2019, revealed, among other things, non-compliance with specific directions issued to the bank by the RBI under the Supervisory Action Framework (SAF). Based on this, a Notice was issued to the bank, advising it to show cause why a penalty should not be imposed for failing to follow the directions.
After reviewing the bank's responses and oral submissions made during the personal hearing, the RBI-determined that the aforementioned charge of non-compliance with RBI directions was substantiated and warranted the imposition of monetary penalties.