RBI imposes monetary penalty on Sawantwadi Urban Co-operative Bank, here's why
The Reserve Bank of India has fined Sawantwadi Urban Co-operative Bank ₹3 lakh for contravention of directions contained in the Supervisory Action Framework. The penalty came after a thorough statutory inspection of the bank.
PremiumThe Reserve Bank of India (RBI) on Monday imposed a monetary penalty of ₹3 lakh on Sawantwadi Urban Co-operative Bank for contravention of directions contained in the Supervisory Action Framework (SAF). The co-operative bank is based in a taluka called Sawantwadi in Maharashtra.
In a notification, RBI said, this action 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 bank with its customers.
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According to the central bank, the statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and all related correspondence pertaining to the same, revealed, inter alia, that despite SAF restrictions, the bank had sanctioned, other than permitted category, of fresh loans and advances and had offered interest rates on term deposits higher than those offered by State Bank of India.
Following this, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed for contravention of directions issued by RBI under the Supervisory Action Framework.
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"After considering the bank’s written reply to the notice, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty," RBI said.
This penalty has been imposed in the exercise of powers vested in RBI under the provisions of the Banking Regulation Act, 1949 (the Act), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
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