The Reserve Bank of India (RBI) on May 17 said it has imposed monetary penalty of Rs 59.10 lakh on Karnataka Bank for rule violations.
The penalty on Karnataka Bank was imposed as bank had opened savings deposit accounts in the name of certain ineligible entities and failed to review / renew certain loan accounts within the prescribed period and yet did not classify these accounts as Non-Performing Assets, RBI said in a release.
The central bank conducted Statutory Inspection for Supervisory Evaluation of the bank to its financial position as on March 31, 2022 and findings showed that the bank has not complied with RBI directions and related correspondence in that regard, the release said.
After this, the central bank issued a notice to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the directions, the release added.
“The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers,” the RBI said in the release.
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