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RBI imposes penalty on Sahebrao Deshmukh, Progressive Co-operative Bank in Mumbai

RBI imposes penalty on Sahebrao Deshmukh, Progressive Co-operative Bank in Mumbai

New Delhi [India]: The Reserve Bank of India (RBI) on Thursday announced that it has imposed a monetary penalty of Rs. one lakh (rupees one lakh only) on Sahebrao Deshmukh Co-operative Bank and Rs. four lakh (rupees four lakh only) on Progressive Co-operative Bank Ltd in Mumbai.

The RBI had imposed a monetary penalty in exercise of the powers vested in it under the provisions of Section 47A(1) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for violation of instructions/guidelines issued by the Reserve Bank of India relating to opening of on-site ATM.

It had issued a show cause notice to the bank, in response to which the bank submitted a written reply and also made oral submissions thereon. After considering the facts of the case and bank’s reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.

However, in case of Progressive Co-operative Bank, the apex bank issued notice under the provisions of Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies), for violation of instructions/guidelines issued by the Reserve Bank of India relating to lending to nominal members, financing an NBFC and KYC norms.

The bank, in response had submitted a written reply and also made oral submissions thereon. After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.

PTI