RBI imposes two cr fine on RBL Bank

RBI imposes two cr fine on RBL Bank

On Monday,(RBI) the Reserve Bank of India imposed a ₹ two crore monetary penalty on RBL Bank Limited for breaching deposit, board composition norms.

RBI further stated.

"The action is based on lack in regulatory compliance and is not intend to pronounce upon the validity of any agreement entered or transaction into by the bank with its customers,"

RBI conducted the bank's statutory inspection for Supervisory Evaluation (ISE) concerning its financial position on 31 March 2019 (ISE 2019).

The examination of Risk Assessment Report and Inspection Report about ISE 2019, RBI letter dated 27 October 2020, and related correspondence in the matter revealed, among other things, breach of the regulatory direction and non-compliance with the provisions of the Act to the extent of opening of five saving deposit account in the name of a co-operative bank and failure to comply with the requirements of section 10A(2)(b) of the Act relating to the composition of Board of Directors.

RBI imposes two cr fine on RBL Bank 1getty image

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RBI stated.

"In furtherance to the same, a notice was issued to bank advising it to show cause as to why penalty should not be charge for contravention of / non-compliance with the provisions of the directions/Act,"

After considering the bank's reply to the show-cause notice, oral submissions made during the personal hearing, and examination of additional requests made by the bank,

RBI concluded that the charge above of contravention of / non-compliance with the directions /Act was substantiated and warranted a burden of monetary penalty on the bank.

Recently, an overwhelming 99.94 percent of RBL Bank shareholders approved the reappointment of Mr. Vishwavir Ahuja as chief executive and managing director for the fourth term beginning from June this year. Ahuja joining the bank in the year 2010 from Bank of America and has been the effort behind the successful listing of the lender in August 2016 and driving its balance sheet by mani-fold.

Though the board had in January this year cleared his fourth three-year term till June 2024, the Reserve Bank in June had only cleared his reappointment for only one year beginning June 2021.

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