RBI Imposes Monetary Penalty on Panvel Co-operative Urban Bank

In a move to ensure compliance with regulatory directives, the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1.00 lakh on The Panvel Co-operative Urban Bank Ltd., Raigad, Maharashtra.

According to the press release, the penalty was levied based on the findings of a statutory inspection conducted by the RBI, which revealed the bank’s non-compliance with directions issued under the ‘Supervisory Action Framework’ (SAF) for Primary (Urban) Co-operative Banks (UCBs).

Specifically, the RBI found that the bank had sanctioned fresh loans carrying a risk weight of more than 100%, in violation of the specific directions issued under the SAF. After considering the bank’s response to the show-cause notice, the RBI determined that the charge of non-compliance was sustained, warranting the imposition of a monetary penalty.

The RBI clarified that this action is based solely on the deficiencies in regulatory compliance and is not intended to pass judgment on the validity of any transactions or agreements entered into by the bank with its customers. The central bank also emphasized that the penalty is without prejudice to any other action that may be initiated against the bank in the future.

This move by the RBI underscores its commitment to ensuring a robust and well-regulated banking system in the country. By proactively addressing instances of non-compliance, the central bank aims to foster a culture of accountability and adherence to regulatory guidelines among financial institutions.

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RBI Imposes Monetary Penalty on Jogindra Central Co-operative Bank for Non-Compliance 

RBI Imposes Penalty on Ambarnath Jai Hind Co-operative Bank for Non-Compliance

The Panvel Co-operative Urban Bank Ltd. now faces the challenge of strengthening its internal controls and compliance mechanisms to avoid similar penalties in the future. The banking community will be closely watching the bank’s response and its efforts to rectify the identified shortcomings.

Overall, this action by the RBI serves as a reminder to all financial institutions under its purview to prioritize regulatory compliance and maintain the highest standards of governance and risk management.

Source: Reserve Bank of India – Press Releases