New Delhi, Feb 14 (UNI) The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 61.40 lakh on The Nainital Bank Limited for non-compliance with certain directions issued by RBI on ‘Interest Rate on Advances’ and ‘Customer Service in Banks’.
According to RBI, the bank did not benchmark certain floating rate loans extended to MSMEs to an external benchmark rate; and also the bank levied penal charges for non-maintenance of minimum balance in savings bank accounts at flat rates instead of the charges being directly proportionate to the extent of shortfall.
The statutory Inspection for Supervisory Evaluation (ISE 2023) of the bank was conducted by RBI with reference to its financial position as on March 31, 2023.
Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, additional submissions made by it and oral submissions made during the personal hearing, RBI found, inter alia, that the above mentioned charges against the bank were sustained, warranting imposition of monetary penalty.
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. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
