Mumbai (Maharashtra) [India], November 21 (ANI): The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3 lakh on Parwanoo Urban Co-operative Bank, Parwanoo, Himachal Pradesh, for violating certain rules framed.

The penalty was imposed in exercise of powers vested in the central bank under various sections of Banking Regulation Act, 1949, due to "failure of the bank to adhere to the directions issued by RBI."The central bank has said the 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 and Risk Assessment Report of the bank based on its financial position as on March 31, 2021, revealed non-compliance with specific directions issued to the bank by RBI under Supervisory Action Framework (SAF). Based on the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the said directions.

After considering the bank's reply to the notice and submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with RBI directions was substantiated and warranted imposition of a monetary penalty.

The Supervisory Action Framework (SAF) envisages, in the initial stage of deterioration in the financial position, self-corrective action by the management of the urban cooperative banks themselves and supervisory action by the Reserve Bank in case the financial position of the bank does not improve. (ANI)