RBI Fines Arunachal Pradesh Gramin Bank Rs 14 Lakh for non-compliance
This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of ..............
NEW DELHI- The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 14 lakh on Arunachal Pradesh Gramin Bank for non-compliance with regulatory guidelines.
The RBI announced a fine of Rs 14 lakh on Arunachal Pradesh Gramin Bank for not following financial criteria and ‘Know Your Customer’ (KYC) directives. Such mistakes can occur, especially in smaller or rural banks, but the RBI, as the regulator, consistently monitors compliance and takes necessary actions.
This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of section 47A(1)(c) read with sections 46(4)(i) and 51(1) of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2023.
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Based on supervisory findings of non-compliance with RBI directions 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 directions.
After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank had:
- failed to classify certain loan accounts as non-performing assets (NPA) resulting into divergence in asset classification of loan accounts; and
- allotted multiple Unique Customer Identification Code (UCIC) to its individual customers.
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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. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
As the RBI continues to uphold stringent regulatory measures, consumers should remain vigilant about the financial institutions they engage with, ensuring they adhere to proper guidelines and maintain financial integrity.
