PremiumRBI said Dhanlaxmi Bank is facing penalties for contravention of a section of the Banking Regulation Act, 1949 read with a paragraph of The Depositor Education and Awareness Fund Scheme, 2014
The Reserve Bank of India (RBI) has imposed a penalty of ₹27.5 lakh on Thrissur-based Dhanlaxmi Bank. Further, a ₹20 lakh penalty was also slapped on the NE & EC Railway Employees’ Multi-State Primary Cooperative Bank, Gorakhpur.
In a statement issued on Monday, the banking regulator said Dhanlaxmi Bank is facing penalties for contravention of a section of the Banking Regulation Act, 1949 read with a paragraph of The Depositor Education and Awareness Fund Scheme, 2014 (the scheme).
The RBI said the Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted with reference to its financial position as on 31 March 2020, and the examination of the Risk Assessment Report and Inspection Report pertaining to the same, revealed, inter-alia, contravention of the provisions of the Act read with the scheme.
A notice was issued to the bank advising it to show cause as to why the penalty should not be imposed on it for contravention.
"After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of contravention of aforesaid provisions of the Act read with the scheme was substantiated and warranted imposition of monetary penalty on the bank," it said.
In another statement, the RBI said the inspection report of the NE & EC Railway Employees’ Multi-State Primary Co-operative Bank based on its financial position as on 31 March 2019 revealed non-adherence/violation of specific directions issued to it under the Supervisory Action Framework (SAF).
In both cases, the RBI said, the penalty is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.
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