RBI slaps J&K co-op bank with Rs. 11 lakh fine

The Reserve Bank of India has imposed a monetary penalty to Rs. 11 lakh on The Jammu & Kashmir State Co-operative Bank, Srinagar.

The penalty, imposed by an order on September 23, is for contravention of section 23 read with section 56 of the Banking Regulation Act, 1949.

“This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949,” the RBI said.

The statutory inspection was by Nabard on its financial position as on March 31, 2019 and the Inspection Report revealed that the bank had opened branches without obtaining the prior permission of the RBI.

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 violation of the said directions, the RBI said.

“After considering the bank’s reply, RBI came to the conclusion that the aforesaid charge of contravention of section 23 read with section 56 of the Banking Regulation Act, 1949 was substantiated and warranted imposition of monetary penalty,” it further said.