RBI imposes monetary penalty of Rs 2 crore on RBL Bank

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Reserve Bank of India (RBI) on September 27 imposed a monetary penalty of Rs 2 crore on RBL Bank for contravention of former's directions on Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 and non-compliance with provisions of clause (b) of sub-section (2) of section 10A  of the Banking Regulation Act, 1949, RBI said in a release.

The central bank had conducted a statutory inspection for Supervisory Evaluation (ISE) of the bank with reference to its financial position as on March 31, 2019 (ISE 2019), the central bank said.

The examination of the risk assessment report and inspection report pertaining to ISE 2019 revealed contravention of the regulatory directions and non-compliance with 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, it added.

The RBI issued a notice to the bank advising it to show why penalty should not be imposed. Upon considering the bank's reply, RBI came to the conclusion that the aforesaid charges were substantiated and warranted imposition of monetary penalty on the bank, RBI said.