The Rajgurunagar Sahakari Bank Limited, situated in Pune, was fined Rs 4 lakh by the Reserve Bank of India (RBI) on Monday for failing to follow its instructions regarding interest rates and deposits.
On October 14, 2022, the RBI issued an order in this regard. The Rajgurunagar Sahakari Bank Limited has been penalised “for contravention of the directions issued by the Reserve Bank of India (RBI) on Interest Rate on Deposits.”
The central bank said in a statement, “This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.”
The RBI 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.”
According to the bank’s Inspection Report, which was based on its financial status as of March 31, 2021, the bank did not pay interest on the balances in the current accounts of deceased sole proprietorship businesses or individual depositors when paying claimants.
Based on this, a notice was sent to the bank asking it to provide justification for not imposing a fine for failing to follow the instructions.
The RBI determined that the aforementioned charges of non-compliance with RBI directions were proved and warranted imposition of a monetary penalty after taking into account the bank’s written response to the show cause notice.