The Reserve Bank of India announced on Tuesday that it has fined Himachal Pradesh State Cooperative Bank, Shimla, Rs 40 lakh for failing to follow certain regulatory directions provided by NABARD.
This action is focused on regulatory enforcement issues and is not meant to be a judgment on the merits of any transaction or arrangement between the bank and its customers. The penalty was levied for failing to follow regulatory directions provided by NABARD in the ‘Review of Frauds – Guidelines on Monitoring and Reporting System,’ according to the Reserve Bank of India.
The Reserve Bank of India (RBI) has, by an order dated April 27, 2021, imposed a monetary penalty of Rs40.00 Lakh (Rupees Forty Lakh only) on Himachal Pradesh State Co-operative Bank Ltd., Shimla (the bank) for non-compliance with regulatory directions issued by NABARD contained in “Review of Frauds – Guidelines on Monitoring and Reporting System”, the RBI order said.
The penalty was levied for failing to follow regulatory directions provided by NABARD in the ‘Review of Frauds – Guidelines on Monitoring and Reporting System,’ according to the Reserve Bank of India.
The National Bank for Agriculture and Rural Development (NABARD) conducted a statutory inspection of the bank with reference to the bank’s financial position as of March 31, 2019, and the Inspection Report (IR) pertaining thereto, as well as an examination of all related correspondence regarding fraud reporting, which revealed, among other things, non-compliance with the aforementioned directions issued by NABARD.
In support of this, the bank was served with a notice requiring it to show cause why no penalty should be levied for violating the Act’s provisions or NABARD’s directives. RBI concluded that the aforementioned allegation was substantiated and warranted imposition of monetary penalty after considering the bank’s response to the notice and oral submissions made during the personal hearing.
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