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RBI Action: Another major move from the Reserve Bank of India (RBI) is here. the central bank has simultaneously imposed a hefty financial penalty on four banks. These include Bank of Maharashtra, Bank of Karnataka. In addition, the certificate of registration i.e. license of 10 non banking finance companies, has been canceled. 7 of the companies have voluntarily surrendered their certificates for various reasons. Also, an NBFC had received some relief, RBI decided to restore the COR of Jupiter Management Service Private Limited (Gurgaon Haryana).
RBI’s examination in March 2024 revealed some non-compliance issues. This prompted the issuance of a show cause notice to all the banks. The central bank's decision to impose penalty after the banks respond, and further investigation confirming the allegations, substantiated the claims. The list includes The Shahada People’s Co-operative Bank Limited (Maharashtra), Motiram Agarwal Jalna Merchants Co-operative Bank Limited (Maharashtra), Sahyadri Sahakari Bank Limited (Mumbai Maharashtra) and The Government Employees Co-operative Bank Limited (Dharwad, Karnataka).
What actions were taken against the banks?
Due to inadequate adherence to the banking regulations, some non-performing accounts were regularized without any acceptable payment plan from the issuing source. This malpractice of The Shahada People’s Co-operative Bank Limited drew the attention of the authorities, and an imposition of Rs 2 lakh was levied.
Violations of moving funds between associated borrowers led to the granting of loans to directors, who were subsequently found to possess relationships with other parties who were supposed to remain outside the official loans and advances framework. This malpractice led to the imposition of Rs 6 lakh on Motiram Agarwal Jalna Merchant Co-operative Bank Limited.
Due to improper SAAF compliance, the bank was not issuing new loans and advances with the 50% reduction of the previously stipulated single borrower cap. As a result, the bank was found abusing the regulatory restrictions, which attracted a penalty of Rs 20,000.
Failure to upload the KYC data of the bank’s clientele to the designated KYC Record Registry led the Government Employees Co-operative Bank Limited to cyber control shortcomings, inflicts of Rs 1 lakh due to the cyber security measures failure. banking framework.Cancellation of licenses of these companies
RBI has revoked the registration certificate of 10 non-banking financial companies from Maharashtra. All of these companies are barred from conducting business as of June 25. This list includes Paridhi Training Company Limited, Progressive Securities Private Limited, Finance Private Limited, Sunflex Finance and Investments Limited, Tirupati Holdings Limited, Vasant Sanghvi Security, Vividh Finance and Holdings Private Limited, Variety Investment Private Limited and Sriramanjeneya Investment Private Limited.
RBI 1 Action rbi : Heavy fine imposed on these 4 banks, license of 10 companies cancelled
These companies gave up CoR
Because of the voluntary retreat from the non-banking financial institution sector, Samridhi Swastik Trading and Investments Limited, based in Madhya Pradesh, has surrendered its CoR. Also, Strategic Capital Corporation Private Limited, based in Mumbai, Mangalam Securities Limited from New Delhi, and Anam Finance Private Limited from Chennai, surrendered their registration certificates for the same reasons.
Malhotra InfoOne India Private Limited has surrendered its certificate as the company does not require a CoR as it meets the criteria of a registered investment company. In addition, Welcome Investment Private Limited, Tarish Investment and Trading Company Private Limited, and several other firms surrendered their certificates due to other reasons such as amalgamation, dissolution, or survey strike off.
RBI 2 In addition to these actions, 10 other company licenses were revoked alongside the 10 issued a heavy fine.
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