MM TAX CLUB

The Reserve Bank of India (RBI) has, by an order dated January 02, 2024, imposed a monetary penalty of ₹6.00 Lakh (Rupees Six Lakh only) on Sakthi Finance Limited, Coimbatore, Tamil Nadu (the company) for non-compliance with the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’ issued by RBI. This penalty has been imposed in exercise of powers vested in RBI under the provisions of clause (b) of sub-section (1) of section 58 G read with clause (aa) of sub-section (5) of section 58 B of the Reserve Bank of India Act, 1934.

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 company with its customers.

Background

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Risk Assessment Report and Inspection Report pertaining to the aforementioned inspection and all related correspondence pertaining to the same, revealed, inter alia, that the company did not undertake risk categorization of its customers and carry out periodic updation of KYC for its high risk customers during the financial year 2021-22, as part of on-going due diligence of its customers. Consequently, a notice was issued to the company advising it to show cause as to why penalty should not be imposed for its failure to comply with the RBI directions, as stated therein.

After considering the company’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty, to the extent of such non-compliance with such directions.

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The Reserve Bank of India (RBI) has, by an order dated January 08, 2024, imposed a monetary penalty of ₹120.47 lakh (Rupees One crore twenty lakh and forty-seven thousand only) on Dhanlaxmi Bank Ltd. (the bank) for non-compliance with certain directions issued by RBI on 'Loans and Advances – Statutory and Other Restrictions', 'Reserve Bank of lndia (Know Your Customer (KYC)) Directions, 2016' and 'Reserve Bank of lndia (Interest Rate on Deposits) Directions, 2016'. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Section 46(4)(i) 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.

Background

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. The examination of the Risk Assessment Report/Inspection Report pertaining to ISE 2022, and all related correspondence in that regard, revealed, inter alia, non-compliance with the aforesaid directions by the bank, to the extent it (1) sanctioned loans to certain borrowers against pledge of gold ornaments and jewellery for non-agricultural purposes exceeding 75 per cent of the value of gold ornaments and jewellery, (ii) offered interest rate applicable to normal term deposits on certain senior citizen term deposits instead of higher rate of interest applicable to such deposits, (iii) did not obtain PAN or Form 60 for certain term deposit accounts (exceeding fifty thousand rupees), and (iv) allotted multiple Customer Identification Code to certain individual customers instead of a Unique Customer Identification Code (UCIC) to each customer. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for the failure to comply with the directions issued by RBI, as stated therein.

After considering the bank's reply to the notice, oral submissions made during the per

sonal hearing and examination of additional submissions made by it, RBI came to the conclusion that the aforementioned charge of non-compliance was substantiated and warranted imposition of monetary penalty.Source

The Reserve Bank of India (RBI) has, by an order dated January 08, 2024, imposed a monetary penalty of ₹120.47 lakh (Rupees One crore twenty lakh and forty-seven thousand only) on Dhanlaxmi Bank Ltd. (the bank) for non-compliance with certain directions issued by RBI on 'Loans and Advances – Statutory and Other Restrictions', 'Reserve Bank of lndia (Know Your Customer (KYC)) Directions, 2016' and 'Reserve Bank of lndia (Interest Rate on Deposits) Directions, 2016'. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Section 46(4)(i) 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.

Background

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI with reference to its financial position as on March 31, 2022. The examination of the Risk Assessment Report/Inspection Report pertaining to ISE 2022, and all related correspondence in that regard, revealed, inter alia, non-compliance with the aforesaid directions by the bank, to the extent it (1) sanctioned loans to certain borrowers against pledge of gold ornaments and jewellery for non-agricultural purposes exceeding 75 per cent of the value of gold ornaments and jewellery, (ii) offered interest rate applicable to normal term deposits on certain senior citizen term deposits instead of higher rate of interest applicable to such deposits, (iii) did not obtain PAN or Form 60 for certain term deposit accounts (exceeding fifty thousand rupees), and (iv) allotted multiple Customer Identification Code to certain individual customers instead of a Unique Customer Identification Code (UCIC) to each customer. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for the failure to comply with the directions issued by RBI, as stated therein.

After considering the bank's reply to the notice, oral submissions made during the per

sonal hearing and examination of additional submissions made by it, RBI came to the conclusion that the aforementioned charge of non-compliance was substantiated and warranted imposition of monetary penalty.Source