Blog: RBI slaps penalty on The Parwanoo Urban Co-operative Bank for violations – Moneycontrol

RBI slaps penalty on The Parwanoo Urban Co-operative Bank for violations

The Inspection Report and Risk Assessment Report of the bank based on its financial position as on March 31, 2021 revealed non-compliance with specific directions issued to the bank by RBI under Supervisory Action Framework (SAF), the RBI said.

November 21, 2022 / 04:41 PM IST

The Reserve Bank of India (RBI) on November 21 imposed a monetary penalty of Rs 3 lakh on The Parwanoo Urban Co-operative Bank Limited, Parwanoo, Himachal Pradesh for violating certain rules.

“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 in a press release.

RBI clarified in the statements that the penalties are not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers.

The Inspection Report and Risk Assessment Report of the bank based on its financial position as on March 31, 2021 revealed non-compliance with specific directions issued to the bank by the RBI under Supervisory Action Framework (SAF), the central bank said. Subsequently, a notice was issued to the bank and penalty was imposed.

The RBI’s enforcement operations are conducted by the Enforcement Department. The RBI’s EFD was set up in April, 2017 to separate enforcement action from supervisory process. EFD identifies actionable violations from the inspection reports, risk assessment reports and scrutiny reports.

Market intelligence reports, references from the top management and complaints are also used for investigation. An Adjudication Committee then adjudicates the violations and determine the quantum of penalty. The penalty thus imposed is disclosed by RBI in the form of a press release and by the regulated entity as per the disclosure norms. The regulated entity will then be required to pay the penalty within a specific period.

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