Mumbai, Feb 27 (UNI) The Reserve Bank of India (RBI) on Thursday imposed a monetary penalty of Rs 33.30 lakh on Bombay Mercantile Co-operative Bank Ltd., Mumbai for contravention of the provisions and earning income from business not permissible under the Banking Regulation Act.
The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2023. Based on supervisory findings of contravention of statutory provisions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions.
After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the charge against the bank was sustained, warranting imposition of monetary penalty that “The bank had engaged in and earned income from business not permissible under the Banking Regulation Act, 1949.”
This action is based on deficiencies in statutory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
The Central Bank also imposed Rs one lakh fine each on two other small banks — The Business Co-operative Bank Ltd., Nashik, Maharashtra and The Lasalgaon Merchants Co-operative Bank Ltd., Nashik, Maharashtra for contravention of the provisions of certain provisions and for non-compliance with certain directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’.
