The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 5 lakh on the Parbhani District Central Cooperative Bank for violating provisions under Section 20 and Section 26A, read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
In an official press release issued on Thursday, the RBI stated, “This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.”
The bank’s statutory inspection was conducted by the National Bank for Agriculture and Rural Development (NABARD), assessing its financial position as of March 31, 2023. Based on supervisory findings, the bank was found to have contravened statutory provisions, prompting the RBI to issue a show-cause notice.
Following a review of the bank’s reply to the notice and oral submissions during a personal hearing, the RBI found two key violations, Sanctioning loans to its directors, in breach of regulatory norms and Failing to transfer eligible amounts to the Depositor Education and Awareness Fund (DEAF) within the prescribed time frame.
The RBI clarified that the penalty was imposed for deficiencies in regulatory compliance and does not impact the validity of any transactions or agreements entered into by the bank with its customers. It added that this action is without prejudice to any additional measures that may be taken against the bank.
