SRINAGAR: The Reserve Bank of India (RBI) on Monday informed that it has imposed a monetary penalty of Rs11 lakh on the Jammu and Kashmir State Co-operative Bank Limited, Srinagar for deficiencies in regulatory compliance.
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, the RBI said.
The central bank said that the 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 statutory inspection of the co-operative bank was conducted by NABARD with reference to the bank’s financial position as on March 31, 2019.
The Inspection Report pertaining thereto, revealed, inter alia, contravention of section 23 read with section 56 of the Banking Regulation Act, 1949 as the bank had opened branches without obtaining the prior permission of the RBI.
Based on the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for violation of the said directions.
After considering the bank’s reply, the RBI came to the conclusion that the charge of contravention of section 23 read with section 56 of the Banking Regulation Act, 1949 was substantiated and warranted imposition of monetary penalty.