The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 crore each on City Union Bank (CUB) and Tamilnad Mercantile Bank (TMB).
In the case of CUB, the RBI, in a statement, said the penalty has been imposed for contravention of/ non-compliance with certain provisions of the Reserve Bank of India (Lending to Micro, Small & Medium Enterprises Sector) Directions, 2017 and the circulars on Educational Loan Scheme and Credit Flow to Agriculture – Agricultural Loans – Waiver of Margin/ Security Requirements.
In the TMB case, RBI imposed the penalty for non-compliance with some directions regarding “Cyber Security Framework in Banks”, 2016.
In both the aforementioned cases, the central bank said: “The penalty has been imposed in exercise of powers vested in RBI under the provisions of …the Banking Regulation Act, 1949.
“This action is based on the 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.”
Meanwhile, RBI has imposed a Rs 90 lakh monetary penalty on Ahmedabad-based Nutan Nagarik Sahakari Bank.
The penalty has been imposed for non-compliance with directions contained in Master Directions on ‘Interest Rate on Deposits’, ‘Know Your Customer (KYC)’ and Circular on ‘Frauds Monitoring and Reporting Mechanism’, RBI said in a statement.
“This penalty has been imposed in exercise of powers vested in RBI under…the Banking Regulation Act, 1949.
“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.