RBI imposes monetary penalty on Maharashtra State Co-operative Bank

Mumbai: The Reserve Bank of India (RBI) on Monday said it has imposed a Rs 37.50 lakh monetary penalty on Maharashtra State Co-operative Bank Ltd for non-compliance with directions related to reporting and monitoring of frauds.

The Reserve Bank of India (RBI) has, by an order dated July 7, 2022, imposed a monetary penalty of Rs 37,50,000 on Maharashtra State Co-operative Bank Ltd, Mumbai for non-compliance with the directions issued by NABARD on ‘Frauds – Guidelines for Classification, Reporting and Monitoring’, the RBI said in a statement. “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,” the RBI said.

The statutory inspection of the bank conducted by NABARD with reference to the bank’s financial position as on March 31, 2019, the Inspection Report pertaining thereto and examination of all related correspondence revealed, inter alia, non-compliance by the bank with aforesaid directions issued by NABARD. In furtherance of the same, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for contravention of the aforesaid directions.

After considering the bank’s reply to the notice, RBI came to the conclusion that the charge of non-compliance with directions issued by NABRAD was substantiated and warranted the imposition of a monetary penalty, the RBI said.