RBI imposes Rs 55 lakh penalty on THIS financial institution

Image Source : PTI RBI imposes Rs 55 lakh penalty on THIS financial institution
The RBI on Wednesday mentioned it has imposed a Rs 55 lakh penalty on Pune-based Seva Vikas Cooperative Bank Limited for non-compliance with sure instructions, together with for not guaranteeing end-use of funds lent.
The penalty, it mentioned, has been imposed for non-compliance with sure instructions within 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 on the bank…(i) 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,” it mentioned.

A discover was issued to Seva Vikas Cooperative Bank advising it to indicate trigger as to why penalty shouldn’t be imposed on it for such non-compliance with the instructions.
“After considering the bank’s reply to the notice, RBI concluded that the charge of non-compliance with aforesaid RBI directions was substantiated and warranted imposition of monetary penalty,” the central financial institution mentioned.
It, nonetheless, added the penalty relies on the deficiencies in regulatory compliance and “is not intended” to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its prospects.
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