Reserve Bank of India imposes monetary penalty on Vasai Janata Sahakari Bank Ltd., Dist. Palghar
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on Vasai Janata Sahakari Bank Ltd., Dist. Palghar by order dated January 20, 2022. RBI said the bank contravened directions on 'Exposure Norms and Statutory / Other Restrictions – UCBs' by not adhering to the ceiling on advances to nominal members in certain cases. The penalty was imposed under the Banking Regulation Act, 1949, after considering the bank's reply to the show-cause notice.
RBI imposed a monetary penalty after an inspection of the bank's financial position as on March 31, 2020 found non-compliance with RBI's directions on 'Exposure Norms and Statutory / Other Restrictions – UCBs'. The specific lapse cited was that the bank had not adhered to the ceiling on advances to nominal members in certain cases. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Severity Assessment
This is a monetary penalty of Rs 2 lakh, which falls within the lowest monetary band; there is no separate operational restriction.
The bank must absorb the monetary penalty and ensure future compliance with RBI exposure norms, especially limits on advances to nominal members. The action does not itself impose an ongoing operational restriction, but it signals heightened regulatory scrutiny of the bank's lending practices.
Published as Vasai Janata Sahakari Bank Ltd., Dist. Palghar
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