RBI imposed the fine over contravention of its master circulars on Income Recognition, Asset Classification, Provisioning and other related Matters, and on Board of Directors
Reserve Bank of India (RBI) has fined The Kuppam Co-operative Town Bank, based in Chittoor district of Andhra Pradesh ₹5 lakh, a statement on Tuesday read. The action has been taken over contravention of certain provisions of the directions issued by RBI contained in the Master Circular on Income Recognition, Asset Classification, Provisioning and other related Matters and Master Circular on Board of Directors for urban co-operative banks.
“This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 taking into account, the failure of the bank to adhere to the aforesaid directions," 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, the apex bank further added.
An investigation report based on the bank's financial position as on March 31. 2019, showed non-compliance on the co-operative bank's part, following which a show cause notice was issued asking the lender why penalty should not be imposed on it for the same.
“After considering the bank’s written reply and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty," RBI said.
In a separate order, the RBI fined Spice Money 2.44 lakh for contravention of / non-compliance with certain provisions of the directions issued by RBI contained in the Master Direction on Issuance and Operation of PPIs in India.