Image Source : PTI The Reserve Bank of India.
The Reserve Bank of India (RBI) has imposed penalties totalling Rs 68.1 lakh on Nainital Bank and Ujjivan Small Finance Bank for violations of regulatory norms. According to an official statement released on Friday, Nainital Bank Ltd faced a penalty of Rs 61.40 lakh for non-compliance with RBI’s guidelines on ‘Interest Rate on Advances’ and ‘Customer Service in Banks’. The nature of the violations and their impact on banking operations were not disclosed in detail.
Further, RBI imposed a penalty of Rs 6.70 lakh on Ujjivan Small Finance Bank for non-compliance with certain directions issued by RBI on ‘Loans and Advances – Statutory and Other Restrictions’.
RBI also levied a penalty of Rs 5.80 lakh on Shriram Finance, a non-banking entity, for non-compliance with certain provisions, including Know Your Customer (KYC ) guidelines and directions on ‘Data Format for Furnishing of Credit Information to Credit Information Companies’.
The penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced upon the validity of any transaction or agreement entered into by the lenders with their customers, according to three separate statements issued by RBI. The imposition of these monetary penalties is without prejudice to any other action that may be initiated by RBI against the company.
RBI supersedes board of Mumbai-based New India Co-op Bank
Meanwhile, a day after imposing several restrictions on city-based New India Co-operative Bank, the RBI on Friday superseded its board citing poor governance standards. A large number of bank’s customers had gathered at its branches on Friday following RBI’s restrictions, which included a bar on issuing new loans and suspension of deposit withdrawals for six months. The bank has 28 branches, mostly located in the Mumbai region.
In a statement, the Reserve Bank of India (RBI) said it has appointed Shreekant, a former chief general manager of State Bank of India (SBI) as ‘Administrator’ to manage the affairs of the bank. The Board of Directors of New India Co-operative Bank, Mumbai, has been superseded for 12 months, the RBI said in a statement.
(With inputs from PTI)
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