RBI imposes monetary penalty of ₹2.00 crore (Rupees Two Crore only) on RBL Bank Limited

 

RBI imposes monetary penalty of ₹2.00 crore (Rupees Two Crore only) on RBL Bank Limited

          Reserve Bank of India, vide Press Release dt. September 27, 2021, informed to public at large that it has imposed a monetary penalty of ₹2.00 crore (Rupees Two Crore only) on RBL Bank Limited.

RBL Bank, formerly known as Ratnakar Bank, is an Indian private sector bank headquartered in Mumbai and founded in 1943

In August 6, 1943, Ratnakar Bank was founded as a regional bank in Maharashtra with two branches in Kolhapur and Sangli founded by Babgonda Bhujgonda Patil from Sangli & Gangappa Siddappa Chougule from Kolhapur.

It mainly served small and medium enterprises (SMEs) and business merchants in the Kolhapur-Sangli belt. Kolhapur-Sangli belt is famous for its sugar industries

Sangli is known as the Turmeric city and the Sugar Belt of India. Sangli is the largest market place for Turmeric & grapes in Asia.

Kolhpaur is famous for 'The Bhavani Mandap' is an imposing old palace with a small museum displaying stuffed wild animals.

The penalty is for

a)    contravention of section 28 (h) of the Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 and for non-compliance with the provisions of clause (b) of sub-section (2) of section 10A of the Banking Regulation Act, 1949 (the Act).

b)    For the non-compliance with the provisions of section 10 A (2) (b) of the Act, penalty is also imposed for the period during which the contravention or default continued.

Reserve Bank of India further informed that: -

i)                   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) of the Act.

ii)                 This 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.

 

Background

 

The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2019 (ISE 2019).

The examination of the Risk Assessment Report and Inspection Report pertaining to ISE 2019, RBI letter dated October 27, 2020 and related correspondence in the matter, revealed, inter alia, contravention of the regulatory directions and non-compliance with the provisions of the Act, to the extent of (i) opening of five savings deposit accounts in the name of a co-operative bank and (ii) failure to comply with the provisions of section 10A(2)(b) of the Act relating to composition of Board of Directors.

In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of / non-compliance with the provisions of the directions/Act, as stated therein.

 

After considering the bank’s reply to the show cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of contravention of / non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank.

 

RBL Bank has physical presence through 435 branches; 1,422 business correspondent branches (of which 271 banking outlets) and 380 ATMs spread across 28 Indian states and Union Territories.

 

Customers can also access RBL Bank services through Mobile Banking, Internet Banking, WhatsApp Banking, ChatPay Banking, Phone Banking, SMS Banking, USSD Banking