New Delhi: The Reserve Bank of India has imposed a fine of Rs 1 lakh on The Kedah People’s Cooperative Bank Limited of Gujarat for violating the Central Bank’s guidelines on loans and advances to directors, relatives and companies. In a circular dated October 5, the Reserve Bank imposed fines under the provisions of Section 47A (1) (c) Section 46 (4) (i) and Section 56 of the Banking Regulation Act. , 1949. “
RBI added, “This action is based on deficiencies in regulatory compliance and is not for the purpose of validating any transaction or agreement entered into by the Bank with its customers.”
It further noted that the Bank’s legal review, which referred to the Bank’s financial position as of March 31, 2019, revealed inconsistencies.
Subsequently, a notice was issued to the bank by the Reserve Bank, instructing it to show the reason why it should not be fined for violating it.
After reviewing the bank’s response to the notice and the oral submissions made during the private inquiry, the RBI said it had concluded that the allegation had been proven and that a cash fine would be imposed.
Meanwhile, the Reserve Bank will begin its October review of its monetary policy on Thursday and the decision on interest rates will be announced after a three-day meeting on Friday (October 8).
Analysts expect the central bank to maintain interest rates for the eighth time in a row. The current repo rate – the rate at which the Reserve Bank lends to commercial banks – stands at 4%.