RBI Slaps Penalty on Pune Municipal Corporation Servant’s Co-operative Urban Bank For Non-Compliance
Pune, 16th December 2023: In a recent development, the Reserve Bank of India (RBI) issued an order dated November 23, 2023, imposing a monetary penalty of ₹1.00 lakh on Pune Municipal Corporation Servant’s Co-operative Urban Bank Limited, situated in Pune, Maharashtra. This penalty stems from the bank’s non-compliance with RBI directives regarding the ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks.’ The penalty has been enforced under the authority vested in RBI by sections 47 A (1) (c), 46(4)(i), and 56 of the Banking Regulation Act, 1949.
The penalty is a result of identified regulatory shortcomings and does not pass judgment on the validity of any transactions or agreements the bank has entered into with its customers.
Following a statutory inspection conducted by RBI evaluating the bank’s financial status as of March 31, 2022, alongside an assessment of the Risk Assessment Report and associated correspondence, it was revealed that the bank had failed to conduct an annual review of inoperative/dormant accounts. Subsequently, a notice was issued to the bank, prompting it to explain why a penalty should not be imposed for its failure to adhere to RBI directives.
After careful consideration of the bank’s written response to the notice and the presentations made during the personal hearing, RBI concluded that the allegations of non-compliance with the aforementioned directives were substantiated. Hence, the imposition of the monetary penalty was deemed necessary.
