In a statement, the Reserve Bank said the bank had not complied with its directions on ensuring end-use of funds in borrowal accounts and classification of loans/ advances as non-performing assets, specific direction of RBI for ensuring that the bank’s balance sheet and profit and loss account are signed by at least three of its directors
The RBI on Tuesday said it has imposed a Rs 90 lakh penalty on Vasai Vikas Sahakari Bank, Maharashtra, for non-compliance with certain directions, including on classification of loans as NPAs, and other directions.
In a statement, the Reserve Bank said the bank had not complied with its directions on ensuring end-use of funds in borrowal accounts and classification of loans/ advances as non-performing assets, specific direction of RBI for ensuring that the bank’s balance sheet and profit and loss account are signed by at least three of its directors.
This was revealed following the statutory inspection of the bank with reference to the bank’s financial position as of March 31, 2019, the Inspection Report pertaining thereto and examination of all related correspondence, the central bank said.
The penalty was imposed after considering the bank’s replies to a show-cause notice and oral submissions made during the personal hearing, the RBI said.
In another statement, the RBI said it has imposed a monetary penalty of Rs 7 lakh on The Citizens Urban Co-operative Bank, Jalandhar, Punjab for “non-adherence with/violation” of certain directions related to non-identification of NPAs, wrong classification of assets and inadequate provisions made due to the wrong classification of assets.
In both cases, the RBI said, penalities were based on the deficiency in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by them with their customers.
