The Reserve Bank of India (RBI) on August 8 said it has imposed monetary penalty on nine entities including Spandana Sphoorty Financial Limited, after the regulator found various violations in regulatory compliance process.
Of the nine entities penalised, eight are cooperative banks. These include Chhattisgarh Rajya Sahakari Bank Maryadit, Goa state cooperative bank, Garha Cooperative Bank and the Yavatmal Urban Cooperative Bank ltd.
In the case of Spandana Sphoorty, the RBI said the action is related to company’s failure to adhere to pricing of credit guidelines for Non-Banking Financial Company- Micro Finance Institutions.
In furtherance to the same, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the RBI directions, the RBI said.
"After considering the company’s reply to the notice, examination of additional submissions made by it and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty," the central bank said.
The RBI imposed a penalty of Rs 2.33 crore on Spandana.
Other banks which are penalised by RBI include Jil Sahakari Kendriya Bank, Maryadit, Warud Urban Cooperative bank, Indapur Urban Cooperative bank and Mehasana Urban Cooperative Bank.
The RBI’s enforcement operation are conducted by the Enforcement Department. The RBI’s EFD was set up in April, 2017 to separate enforcement action from supervisory process. EFD identifies actionable violations from the inspection reports, risk assessment reports and scrutiny reports.
Market intelligence reports, references from the top management and complaints are also used for investigation. An Adjudication Committee then adjudicates the violations and determine the quantum of penalty. The penalty thus imposed would be disclosed by RBI in the form of a press release and by the regulated entity as per the disclosure norms. The regulated entity will then be required to pay the penalty within a specific period.
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