monetary penalty on banks

RBI has vide their press release dated 3rd February, 2021 intimated regarding levying of penalty of Rs.55 lakhs on Seva Vikas Co-operative Bank Limited, Pune and Rs.1.00 lakh on The Kalpvruksha Co-operative Bank Limited, Tumkur, Karnataka.

Levy on Seva bank due to non-compliance with certain directions issued by RBI contained in the “Master Circular – Management of Advances -UCBs” and “Master Circular – Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs.” The penalty has been imposed for not ensuring end use of funds lent (ii) non-adherence to IRAC norms and (iii) restructuring of loan accounts with retrospective effect on grounds not valid, revealed during a scrutiny of the bank conducted by RBI during 2019.

Levy on Kalpvruksha bank due to non-compliance with certain directions issued by RBI contained in the “Master Circular on Board of Directors-UCBs”. The penalty has been imposed for non-compliance by the bank with the directions prohibiting grant of loans and advances to directors, or their relatives and the firms/concerns/companies in which they are interested, as revealed during the statutory inspection of the bank with reference to its financial position as on March 31, 2019.

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