The Reserve bank of India (RBI) imposed monetary penalties on 9 banks on August 8 for failing to comply with instructions of the Government back body. IndusInd Bank, Chhattisgarh Rajya Sahakari Bank, The Goa State Co-operative Bank, Garhaa Co-Operative Bank, The Yavatmal Urban Co-operative Bank, Jila Sahakari Kendriya Bank, Warud Urban Co-operative Bank, Indapur Urban Co-operative Bank, and The Mehsana Urban Co-operative Bank are among the banks fined by RBI. The penalty imposed on eight cooperative banks ranged from Rs. 1 lakh to Rs. 40 lakh for non-compliance with certain directions issued by The Reserve bank of India (RBI).
Furthermore, the RBI imposed a monetary penalty on Spandana Sphoorty Financial, an NBFC. 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) of the Banking Regulation Act, 1949 (the Act).
The RBI stated that the action against Spandana Sphoorty was due to the company's violation of the pricing of credit criteria for Non-Banking Financial Company-Micro Finance Institutions.
In furtherance to the same, 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 RBI directions, the RBI said.
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The penalty imposed on some banks were for failing to comply with certain provisions of the 'Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016', for disposing of the non-banking asset, failing to follow the RBI's instructions on income recognition and asset classification, violating the RBI's directions on Exposure Norms and Statutory/Other Restrictions, failing to pay interest on I term deposit and more.
“After considering the company’s reply to the notice, examination of 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," the central bank said.
