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RBI imposes monetary penalty on Jila Sahakari Kendriya Bank Maryadit, Mandsaur, Madhya Pradesh

The Reserve Bank of India (RBl) has, by an order dated October 07, 2024, imposed a monetary penalty of ₹2.50 lakh (Rupees Two Lakh Fifty Thousand only) on Jila Sahakari Kendriya Bank Maryadit, Mandsaur, Madhya Pradesh (the bank), for contravention of the provisions of section 26A read with section 56 of the Banking Regulation Act, 1949 (BR Act). This penalty has been imposed in exercise of powers vested in RBI, conferred under section 47A(1)(c) read with section 46(4)(i) and section 56 of the BR Act.

The statutory inspection of the bank was conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as on March 31, 2023. Based on supervisory findings of non-compliance with statutory provisions 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 provisions.

After considering the bank's reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty.

The bank had failed to transfer eligible unclaimed deposit amounts to the Depositor Education and Awareness Fund within the prescribed period.

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.

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RBI imposes monetary penalty on Andhra Pragathi Grameena Bank, Andhra Pradesh

The Reserve Bank of India (RBI) has, by an order dated October 10, 2024, imposed a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on Andhra Pragathi Grameena Bank, Andhra Pradesh (the bank) for non-compliance with certain directions issued by RBI on ‘Strengthening of Prudential Norms- Provisioning Asset Classification and Exposure Limit’ read with ‘Income Recognition, Asset Classification and Provisioning Norms-Guidelines (IRAC norms)’. This penalty has been imposed in exercise of powers vested in RBI, conferred under 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 NABARD with reference to its financial position as on March 31, 2023. 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 by it during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting imposition of monetary penalty.

The bank had not classified certain loan accounts as non-performing assets in accordance with the IRAC norms.

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.

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RBI imposes monetary penalty on GoCapital Finance Limited, Chennai, Tamil Nadu

The Reserve Bank of India (RBI) has, by an order dated October 07, 2024, imposed a monetary penalty of ₹1.00 lakh (Rupees One Lakh only) on GoCapital Finance Limited, Chennai, Tamil Nadu (the company) for non-compliance with certain provisions of ‘Master Direction-Reserve Bank of India (Non-Banking Financial Company-Scale Based Regulation) Directions, 2023’, issued by RBI. This penalty has been imposed in exercise of powers vested in RBI, conferred under the provisions of clause (b) of sub-section (1) of section 58G read with clause (aa) of sub-section (5) of section 58B of the Reserve Bank of India Act, 1934.

The correspondence of the company pertaining to the intimation of appointment of additional director revealed, inter alia, non-compliance with RBI directions on change in management of Non-Banking Financial Company. Based on the findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions. After considering the company’s reply to the notice and oral submissions made by it during the personal hearing, RBI found, inter alia that the following charge against the company was sustained, warranting imposition of monetary penalty.

The company failed to take prior written permission of the RBI for effecting change in management resulting in change of more than 30 per cent of its directors, excluding independent directors.

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 company with its customers. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.

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CBDT issues Revised Guidelines for compounding offences under the Income- tax Act, 1961

 In conformity with the  Finance Minister’s budget announcement on simplification and rationalization of compounding procedure, CBDT has issued Revised Guidelines for Compounding of offences under the Income-tax Act, 1961(the 'Act') on 17.10.2024.

The revised guidelines supersede all existing guidelines on the subject and would apply to pending as well as new applications, from the date of its issue. The guidelines are expected to facilitate the stakeholders by reducing complexities arising out of existing multiple guidelines, simplifying the compounding procedure and lowering the compounding charges.

The guidelines have been simplified inter-alia by eliminating the categorization of offences, removing the limit on number of occasions for filing applications, allowing fresh application upon curing of defects which was not permissible under earlier guidelines, allowing compounding of offences under section 275A and 276B of the Act, removing the existing time limit for filing application viz 36 months from the date of filing of complaint, etc.

To facilitate compounding of offences by companies and HUFs, the requirement of main accused filing the application has been dispensed with. The offences of the main accused as well as any or all co- accused can be compounded on payment of relevant compounding charges by the main accused and/or any of the co-accused, under the revised guidelines.

The compounding charges have also been rationalized by abolishing interest chargeable on delayed payment of compounding charges, reducing rates for various offences such as for TDS defaults, multiple rates of 2%, 3% and 5% have been reduced to single rate of 1.5% per month and basis for calculation of compounding charges for non-filing of return has been simplified. Other simplification measures include removal of charge of separate compounding fee from co- accused.

The revised guidelines are an additional step towards simplification of procedures aimed at promoting ease of compliance.

The revised Guidelines for Compounding of offences dated 17.10.2024 are available on https://www.incometaxindia.gov.in.

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