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The Reserve Bank of India fined the Kurla Nagarik Sahakari Bank Rs 1 lakh monetary penalty


- Mansi Tekam




26th October 2021: The Reserve Bank of India fined the Kurla Nagarik Sahakari Bank Rs 1 lakh monetary penalty for violation of the Banking Regulation Act, 1949 (the Act). In its official statement, the RBI said, “The penalty has been imposed on the bank for contravention of Section 26A read with section 56 of the Banking Regulation Act, 1949 (the Act), the Depositor Education and Awareness Fund Scheme, 2014 (the Scheme) framed under section 26A of the Act”. The penalty so imposed is a result of the inspection report of the Kurla Nagarik Sahakari Bank made by the central bank. The information provided by the report based on the financial year 2020 disclosed that the bank balances in some accounts that had been unclaimed for more than ten years had not been transferred to the Depositor Education and Awareness Fund. The RBI circulated a show-cause notice to the bank to explain why penalizing for non-compliance and contravention of the Act by the bank should not be done. RBI has said that its action is based on regulatory compliance inadequacies and is not intended to rule on the legality of any transaction taken into by The Kurla Nagarik Sahakari Bank with its clients. It imposed the said penalty the provisions of Section 47A (1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949. During the personal hearing, RBI concluded that charges against the bank were justified for imposing the monetary penalty based on the bank's reply and oral submission.

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