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The Reserve Bank of India (RBI) on Tuesday imposed a penalty of ₹90 lakh on Vasai Vikas Sahakari Bank Ltd for non-compliance. “This action is based on deficiency 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," the RBI said in a statement.
The statutory inspection of the bank was conducted by the RBI. The inspection report and examination of all related correspondence revealed that the bank had not complied with the RBI directions on ensuring end use of funds in borrowal accounts and classification of loans/ advances as non-performing assets, specific direction for ensuring that the bank’s balance sheet and profit and loss account are signed by at least three of it’s directors.
In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the RBI directions and the provisions of the Act.
“After considering the bank’s replies to the notice and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with such directions and provisions of the Act," the statement said.
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