MUMBAI: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 6 lakh on Sharad Sahakari Bank in Pune for non-compliance with the directions issued by the central bank on 'know your customers' and 'interest rate on deposits'.
The central bank said this action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
RBI said the statutory inspection of the Bank was conducted with reference to its financial position as on March 31, 2021, and an examination of the Risk Assessment Report and all related correspondence pertaining to the same was done.
The inspections revealed that the Bank failed to put in place a system for periodic updation of KYC of accounts and the Bank had not paid applicable interest on balance amounts lying in current accounts of deceased individual depositors or sole proprietorship concerns while making payments to the claimants, the RBI said on Monday in a statement.
A notice was issued to the Bank advising it to show cause as to why a penalty should not be imposed for contravention of the RBI directions, as stated therein.
After considering the bank's reply to the notice and the oral submissions made during the personal hearing, the central bank had come to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of non-compliance with such directions.
RBI said this penalty has been imposed in exercise of powers vested in RBI conferred under the Banking Regulation Act, 1949.