Reserve Bank of India imposes monetary penalty on Noida Commercial Co-operative Bank Ltd., Ghaziabad, U.P.
Case Brief
RBI imposed an order dated May 04, 2022, levying a ₹1.00 lakh penalty on Noida Commercial Co-operative Bank Ltd., Ghaziabad. The penalty was based on inspection findings that the bank had contravened Section 35A and Section 36(1) read with Section 56 of the Banking Regulation Act, 1949 by failing to follow RBI directions prohibiting dividend payments and by paying unclaimed dividends of prior periods.
Based on the inspection report for the bank's financial position as on March 31, 2020, RBI found that Noida Commercial Co-operative Bank Ltd., Ghaziabad had not complied with RBI directions prohibiting payment of dividends, because it paid unclaimed dividends of prior periods. RBI concluded that the contraventions of Section 35A and Section 36(1) read with Section 56 of the Banking Regulation Act, 1949 were substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56.
Severity Assessment
The action is a monetary penalty of ₹1 lakh, which falls in the lowest monetary band and does not involve a broader operational restriction.
The bank must absorb the monetary penalty; the release does not describe any additional restriction on operations, but it records RBI’s finding of non-compliance with its dividend-related directions.
Published as Noida Commercial Co-operative Bank Ltd., Ghaziabad
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