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Last Updated : Oct 28, 2020 10:21 PM IST | Source: Moneycontrol.com

RBI imposes monetary penalty on DCB Bank, Jio Payments Bank for rule violations

The RBI imposed a penalty of Rs 22 lakh on DCB Bank for non-compliance with certain provisions on marketing/distribution of mutual fund/insurance etc, and a penalty of ₹1 crpre on Jio Payments Bank over re-appointment of MD & CEO

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The Reserve Bank of India (RBI) on October 28 imposed monetary penalty on DCB Bank and Jio Payments Bank for various rule violations.

The central bank has imposed a penalty of Rs 22 lakh on DCB Bank for non-compliance with certain provisions on marketing/distribution of mutual fund/insurance etc.

"The penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949," the RBI said.

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An off-site examination of the records pertaining to the para-banking activity of the bank was conducted by the RBI in a matter related to default on the National Spot Exchange Limited (NSEL).

The off-site examination and the related correspondence revealed non-compliance with above-mentioned directions issued by the RBI. 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 on it for non-compliance with the directions, the RBI said.

After considering the bank’s reply to the notice, oral submissions made in the personal hearing, and examination of additional submissions, the RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.

In the case of Jio Payments Bank, the RBI imposed a penalty of Rs 1 crore for non-compliance with RBI directions on timely submission of application in the case of reappointment of Managing Director and Chief Executive Officer under Section 35B of the Banking Regulation Act, 1949 (the Act), the RBI said.

“This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1)(c) read with section 46(4)(i) of the Act. This action is based on the 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 RBI said.

Jio Payments Bank was required to submit an application under Section 35B of the Act in the case of reappointment of MD & CEO of the bank four months prior to the date on which the term of the MD & CEO was to expire.

However, the bank submitted the said application less than a month prior to that date. 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 its failure to comply with the directions issued by the RBI, the banking regulator said.

“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI concluded that the aforesaid charge of non-compliance with RBI directions was established and warranted imposition of monetary penalty,” the RBI said.
First Published on Oct 28, 2020 10:21 pm
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