RBI imposes monetary penalty on Andaman & Nicobar State Co-operative Bank

Mumbai (Maharashtra) [India], September 26 (ANI): The Reserve Bank of India (RBI) on Monday said it has imposed a monetary penalty of Rs 5 lakh on Andaman and Nicobar State Co-operative Bank Ltd for non-compliance with certain provisions of the banking laws.
The RBI said it has issued an order in this regard dated September 22, 2022. Andaman & Nicobar State Co-operative Bank Ltd has been penalised for contravention of/non-compliance with the provisions of Section 20 read with Section 56 of BR Act, 1949 (AACS).
This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.
This action is based on 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 RBI said in a statement.
The inspection report of the bank based on its financial position as on March 31, 2019, revealed, inter alia, violation/non-compliance with the provisions of Section 20 read with Section 56 of the BR Act, 1949 (AACS) as the bank sanctioned unsecured loans to its directors. Based on the same, a Notice was issued to the bank advising it to show cause as to why a penalty should not be imposed for non-compliance with the directions.
After considering the bank’s reply and additional submissions made by it, RBI came to the conclusion that the aforementioned charges of non-compliance with RBI directions were substantiated and warranted the imposition of a monetary penalty. (ANI)