The Reserve Bank of India (RBI) on December 5 imposed a monetary penalty of Rs 5 lakh on The Bharat Cooperative Bank Limited, Bengaluru, for violating certain rules.
The penalty was imposed for non-adherence, violation of directions issued under Exposure Norms and statutory or other restrictions – UCBs, the central bank said in a release.
“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 (AACS), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI,” the RBI added.
The central bank clarified in the statements that the penalties are not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
The inspection report of the bank based on its financial position as on March 31, 2021, revealed that the bank’s investment in commercial paper breached the prudential individual exposure limit of 15 percent of capital funds. Based on the same, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed for non-compliance with the directions.
