These actions on 4 coop banks are based on deficiencies in regulatory compliance
FinTech BizNews Service
Mumbai, January 31: The RBI, by separate orders, in January 2025, has imposed a monetary penalty on each of 3 lenders- 2 banks and 1 NBFC. These actions on the concerned entities are based on deficiencies in regulatory compliance, as per the press release issued by the RBI today.
RBI has imposed monetary penalty on Equitas Small Finance Bank (Rs 65 lakh); India Post Payments Bank (Rs26.70 lakh) and Aptus Finance India (Rs3.10 lakh).
1 The Reserve Bank of India (RBI) has, by an order dated January 20, 2025, imposed a monetary penalty of Rs65 lakh (Rupees Sixty Five Lakh only) on Equitas Small Finance Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Levy of Foreclosure Charges/Pre-payment Penalty on Floating Rate Term Loans’ and ‘Credit Flow to Agriculture – Collateral free agricultural loans’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
The Statutory Inspection for Supervisory Evaluation (ISE) 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 RBI directions.
After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found that the following charges against the bank were sustained, warranting imposition of monetary penalty:
The bank:
This action is based on the 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.
2 The Reserve Bank of India (RBI) has, by an order dated January 15, 2025, imposed a monetary penalty of Rs26.70 lakh (Rupees Twenty Six Lakh Seventy Thousand only) on India Post Payments Bank Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Customer Service in Banks’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47 A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
The Statutory Inspection for Supervisory Evaluation (ISE) 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 RBI 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 following charge against the bank was sustained, warranting imposition of monetary penalty:
The bank upgraded certain Savings Bank accounts without obtaining customers’ consent (in writing or through any other mode) and also levied annual charges after upgradation of those accounts.
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.
3 The Reserve Bank of India (RBI) has, by an order dated January 20, 2025, imposed a monetary penalty of Rs3.10 lakh (Rupees Three Lakh Ten Thousand only) on Aptus Finance India Private Limited (the company) for non-compliance with certain provisions of the ‘Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016’ issued by RBI, relating to ‘Governance Issues’. This penalty has been imposed in exercise of powers conferred on RBI under clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.
The correspondence pertaining to the intimation of appointment of a director revealed, inter alia, non-compliance with RBI directions. Based on the same, a notice was issued to the company advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions. After considering the company’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the company was sustained, warranting imposition of monetary penalty:
The company failed to take prior written permission of the RBI for effecting change in management, resulting in change of more than 30 per cent of its directors, excluding independent directors.
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 company. Further, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the company.
