RBI imposes monetary penalty on The Sahebrao Deshmukh Cooperative Bank Ltd., Mumbai
The Reserve Bank of India (RBI) has, by an order dated December 28, 2022, imposed a monetary penalty of ₹1.00 lakh (Rupees One lakh only) on The Sahebrao Deshmukh Cooperative Bank Ltd., Mumbai (the bank) for non-compliance with the directions issued by RBI on ‘Frauds monitoring and reporting mechanism’. This penalty has been imposed in exercise of powers vested in RBI conferred under section 47 A (1) (c) read with sections 46 (4) (i) and 56 of Banking Regulation Act, 1949 (BR Act), taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
This action is based on deficiency 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.
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2021, and examination of the Risk Assessment Report and all related correspondence pertaining to the same, revealed, inter alia, that the bank had reported cases of fraud with delay. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the RBI directions, as stated therein. After considering the bank’s reply to the notice, additional submissions and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with the RBI directions was substantiated and warranted imposition of monetary penalty.