RBI imposes monetary penalty on Satara
Sahakari Bank Limited
The Reserve Bank of India (RBI) has taken stringent
action against The Satara Sahakari Bank Limited, Mumbai, Maharashtra, by
imposing a monetary penalty of Rs 2 lakh for non-compliance with certain
provisions of the Banking Regulation Act, 1949 (BR Act) and RBI directions on
'Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks
(UCBs)'.
According to RBI, the penalty, imposed by an order
dated April 29, 2024, has been invoked under the powers vested in RBI,
conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR
Act.
The statutory inspection of the bank, with reference
to its financial position as on March 31, 2023, revealed discrepancies in its
compliance with RBI directives.
Based on supervisory findings of non-compliance and
related correspondence, RBI issued a notice to the bank, advising it to show
cause as to why a penalty should not be imposed for its failure to comply with
the said directions.
Following the bank's response to the notice, RBI
found, among other things, that the bank allowed the refund of share capital to
its members despite its last assessed Capital to Risk-Weighted Assets Ratio
(CRAR) being below 9 percent.
The imposition of the monetary penalty is a result
of deficiencies in regulatory compliance and is not intended to pass judgment
on the validity of any transaction or agreement entered into by the bank with
its customers.
Furthermore, the penalty is without prejudice to any
other action that may be initiated by RBI against the bank.
www.economictimes.indiatimes.com
dt. 04-05-2024