The Reserve Bank of India (RBl) has imposed, by an order dated 11 August 2021, a monetary penalty of ₹13.00 lakh (Rupees Thirteen Lakh only) on Ahmednagar Merchant’s Cooperative Bank Limited, Ahmednagar, Maharashtra for contravention of/ non-compliance with the directions issued by RBI to Urban Cooperative Banks on Frauds - Classification and Reporting. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(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 inspection report of the bank based on its financial position as of 31 March 2019, revealed, inter alia, contravention of/ non-compliance with the directions issued by RBI on Frauds – Classification and Reporting. 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 replies and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted the imposition of monetary penalty.
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