RBI Slaps Penalties on Banks for Rule Violations

1 Dec 2023 , 11:07 AM

On November 30, the Reserve Bank of India (RBI) imposed monetary penalties on HDFC Bank, Bank of America, and three co-operative banks for rule violations. HDFC Bank and Bank of America each faced a penalty of Rs 10,000 for violations related to the acceptance of deposits from non-residents (NRIs).

The penalties were imposed under the powers granted to RBI by Section 11(3) of FEMA, 1999, and followed show cause notices sent to the banks.

In response to the show cause notices, the banks submitted written replies and made oral submissions. After evaluating the facts and the banks’ responses, RBI concluded that the violations were substantiated, justifying the imposition of penalties.

The Dhrangadhra People’s Co-operative Bank in Gujarat received a monetary penalty of Rs 1 lakh for non-compliance regarding the ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs).’

The penalties on co-operative banks were imposed under the powers conferred on RBI by Section 47-A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949.

The Patliputra Central Cooperative Bank in Bihar and the Mandal Nagarik Sahakari Bank of Ahmedabad, Gujarat, faced monetary penalties of Rs 1.50 lakh each for non-compliance with regulatory requirements.

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