The Reserve Bank of India has imposed a monetary penalty of ?2.00 lakh on the Baramulla Central Co-operative Bank Limited, Jammu and Kashmir.
The Co-op Bank was faulted for contravention of Sections prohibiting acceptance of fresh deposits.
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, clarifies RBI.
The statutory inspection of the bank was conducted by NABARD with reference to the bank’s financial position as on March 31, 2020 and the Inspection Report pertaining thereto, revealed, inter alia, contravention of Section 6 and Section 9 read with Section 56 of the Banking Regulation Act, 1949, as the bank had let out its premise on rent; held immovable properties, not required for its own use, beyond the maximum period permissible without seeking any extension from RBI for the same.
The bank had also accepted fresh deposits in contravention of specific RBI directions. Based on 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 RBI directions and the said sections of the Banking Regulation Act, 1949.
After considering the bank’s reply, RBI came to the conclusion that the aforesaid charges of contravention /violation of Section 6 and Section 9 read with Section 56 of the Banking Regulation Act, 1949 and specific RBI directions were substantiated and warranted imposition of monetary penalty.
