Mumbai (Maharashtra) [India], May 3 : The Reserve Bank of India (RBI) has taken stringent action against The Satara Sahakari Bank Limited, Mumbai, Maharashtra, by imposing a monetary penalty of Rs 2 lakh for non-compliance with certain provisions of the Banking Regulation Act, 1949 (BR Act) and RBI directions on 'Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks (UCBs)'.
According to RBI, the penalty, imposed by an order dated April 29, 2024, has been invoked under the powers vested in RBI, conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
The statutory inspection of the bank, with reference to its financial position as on March 31, 2023, revealed discrepancies in its compliance with RBI directives.
Based on supervisory findings of non-compliance and related correspondence, RBI issued a notice to the bank, advising it to show cause as to why a penalty should not be imposed for its failure to comply with the said directions.
Following the bank's response to the notice, RBI found, among other things, that the bank allowed the refund of share capital to its members despite its last assessed Capital to Risk-Weighted Assets Ratio (CRAR) being below 9 percent.
The imposition of the monetary penalty is a result of deficiencies in regulatory compliance and is not intended to pass judgment on the validity of any transaction or agreement entered into by the bank with its customers.
Furthermore, the penalty is without prejudice to any other action that may be initiated by RBI against the bank.