Recorded RBI impact
Fine: Rs 1.00 Cr
Monetary penalty · Fresh imposition
Published by RBI
28 Oct 2020
Case Brief
The Reserve Bank of India imposed a monetary penalty on Jio Payments Bank Limited by order dated October 28, 2020. The penalty was for non-compliance with RBI directions requiring timely submission of the application for reappointment of the bank’s Managing Director and Chief Executive Officer under Section 35B of the Banking Regulation Act, 1949. RBI noted that the application was filed less than a month before the expiry of the incumbent’s term, although it was required to be filed four months in advance. Following a show-cause notice, the bank’s reply, oral submissions, and additional submissions, RBI concluded that the violation was established and warranted penalty under section 47A(1)(c) read with section 46(4)(i) of the Act.
Why RBI Acted
RBI found that the bank was required to submit an application under Section 35B of the Banking Regulation Act, 1949, for reappointment of its MD & CEO four months before the expiry of the term, but it submitted the application less than a month before that date. After a show-cause notice, reply, oral submissions, and additional submissions, RBI concluded the non-compliance with its directions was established and imposed a monetary penalty under section 47A(1)(c) read with section 46(4)(i) of the Act.
Operating Impact
The bank must absorb the financial penalty and ensure future compliance with RBI timelines for senior management reappointment applications. The action does not invalidate any customer transactions, but it signals a regulatory compliance lapse that may invite closer scrutiny of governance processes.
Regulatory Basis
- Section 35B of the Banking Regulation Act, 1949
- section 47A (1)(c) read with section 46(4)(i) of the Act
Action Facts
- Primary Impact
- Fine: Rs 1.00 Cr
- Order Date
- 28 Oct 2020
- Effective From
- 28 Oct 2020
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank