Latest News | RBI Imposes Rs 55 Lakh Penalty on Pune-based Seva Vikas Cooperative Bank

Mumbai, Feb 3 (PTI) The RBI on Wednesday said it has imposed a Rs 55 lakh penalty on Pune-based Seva Vikas Cooperative Bank Limited for non-compliance with certain directions, including for not ensuring end-use of funds lent.

The penalty, it said, has been imposed for non-compliance with certain directions in the 'Master Circular - Management of Advances -UCBs' and 'Master Circular - Income Recognition, Asset Classification, Provisioning and Other Related Matters - UCBs'.

"The penalty has been imposed on the bank...(i) for not ensuring end-use of funds lent (ii) non-adherence to IRAC norms and (iii) restructuring of loan accounts with retrospective effect on grounds not valid, revealed during a scrutiny of the bank conducted by RBI during 2019," it said.

A notice was issued to Seva Vikas Cooperative Bank advising it to show cause as to why penalty should not be imposed on it for such non-compliance with the directions.

"After considering the bank's reply to the notice, RBI concluded that the charge of non-compliance with aforesaid RBI directions was substantiated and warranted imposition of monetary penalty," the central bank said.

It, however, added the penalty 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.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)