RBI: The Reserve Bank of India (RBI) is constantly monitoring cases of irregularities in the banking sector and under this RBI is going to impose financial penalty against three major banks. The RBI has taken action against these banks due to violations of rules and procedural errors.
The Reserve Bank of India (RBI) has fined Kotak Mahindra Bank, IDFC First Bank and Punjab National Bank (PNB) for some lapses in regulatory compliance. The Reserve Bank has said that Kotak Mahindra Bank has been fined Rs 61.4 lakh for not following some instructions on loans and advances, legal and other restrictions.
In addition, there are also guidelines on credit systems for bank loan distribution. The Reserve Bank has said that IDFC First Bank has been fined Rs 38.6 lakh for not following some KYC instructions.
Action also against Punjab National Bank
In addition, Punjab National Bank has been fined Rs 29.6 lakh for not following some instructions issued by the Reserve Bank regarding customer service in banks. In all three cases, the RBI has said that the fine is based on a default in regulatory compliance and is not aimed at deciding on the validity of any transaction or agreement made by banks with its customers.
Cooperative bank license canceled
Earlier, the Reserve Bank had canceled the license of ‘Color Merchants Cooperative Bank’ in Ahmedabad. According to the Reserve Bank, they do not have enough capital and earning opportunities. The Reserve Bank said that the registrar of the cooperative societies of Gujarat has been requested to close the bank and issue an order to appoint a liquidator for the bank.
After liquidation, each depositor will be entitled to the deposit insurance and loan guarantee corporation (DICGC) to get an insurance claim amount to a monetary limit of only Rs 5 lakh on its deposits. The Reserve Bank further said that according to the data presented by the cooperative bank, about 98.51 percent deposits are eligible to receive the entire amount of their deposit from DICGC.
Kotak Mahindra Bank
Kotak Mahindra Bank did not comply with guidelines, statutory requirements and some necessary policies regarding loans and advances. Therefore, RBI has imposed a fine of Rs 61.4 lakh on this bank.
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