RBI Imposes Penalty On Bank Of Maharashtra: Banking sector regulator Reserve Bank of India has imposed a fine on PSB (Public Sector Bank) Bank of Maharashtra. RBI has imposed this penalty due to non-compliance of the rules issued by it in loan system offer delivery of bank credit, cyber security framework in bank credit and KYC. RBI has imposed a penalty of ₹ 1,27,20,000 on Bank of Maharashtra under the powers granted under Banking Regulation X 1949.
The Reserve Bank of India said that it had examined the financial position of the bank till March 31, 2023 and the bank’s information technology was also examined till May 2023. During the supervisory investigation, the bank was found to be lacking in compliance with RBI instructions. After this, RBI issued a notice to the bank and asked why maximum penalty should not be imposed on the bank for not following its instructions.
RBI said that after responding to the notice, and subsequent personal hearing and examining the facts provided by the bank, RBI found that the allegations against the bank were proved and penalty was imposed on it. The bank failed to ensure that in the case of some borrowers, the sanctioned funds as per the working capital limit, which is equal to the minimum percentage of the outstanding loan, were met. The bank failed to implement fraud risk management system for all delivery channels. The bank issued multiple customer identification codes instead of issuing unique customer identification codes to the customers. Apart from this, the bank allowed operations in some small accounts which were not meeting the regulatory requirements.
RBI said that action has been taken against the bank by imposing this penalty due to lack of regulatory compliance. This does not mean giving any decision on the validity of any transaction or agreement between the bank and its customers. RBI said that the penalty imposed on the bank has not been imposed with any prejudice.
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