RBI Slaps Rs1.25 Lakh Penalty on Durgapur Mahila Cooperative Bank and RAR Fincare
Moneylife Digital Team 03 September 2024
Reserve Bank of India (RBI) has imposed a total penalty of Rs1.25 lakh on Kolkata-based Durgapur Mahila Cooperative Bank and Tamil Nadu-based RAR Fincare Limited a non-banking financial company (NBFC) for non-compliance with the directions issued by the banking regulator.
 
Durgapur Mahila Cooperative Bank has been penalised Rs1 lakh for non-compliance with certain provisions of master circular on investments by primary Urban Cooperative Banks (UCB) issued by RBI.
 
RBI's statutory inspection found that Durgapur Mahila Cooperative Bank had breached prudential inter-bank counter party limit and prudential inter-bank gross exposure limit.
 
RAR Fincare has been fined Rs25,000 for failing to comply with certain provisions of the master direction on NBFCs non-systemically important non-deposit taking companies, 2016, as well as the Master Direction on scale-based regulation for NBFCs, 2023, issued by RBI.
 
 
RBI found that RAR Fincare made changes to its management, resulting in more than 30% of its directors excluding independent directors being replaced, without obtaining the necessary prior written permission from the RBI.
 
"After considering the reply and oral submissions of the bank and the NBFC during the personal hearing, RBI concluded that the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty," the central bank says.
 
In both cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced on the validity of any transaction or agreement they entered into with their customer.
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