Srinagar, July 07: Reserve Bank of India has imposed a monetary penalty to fourteen banks including Jammu and Kashmir Bank for non compliance with certain provisions of its direction.
According to an order a copy of which lies with KDC reads that Reserve Bank of India has imposed rupees one crore as monetary penalty to Jammu and Kashmir Bank for non compliance with certain provisions of direction issued by RBI on lending to non banking financial companies (NBFC’s). Bank finance to non banking financial companies loans and advances, statutory exposures across banks with the content of circular on reporting to central repository of information on large credits (CRILC) operating guidelines for small finance banks and for contraventions of provisions of section 19 (2) and section 20 (1) of banking regulation act 1949.’’
They said the penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47-A (1) (C) with sections 46 (4) (1) and 51 (1) of the banking regulation act 1949 as applicable.
The action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transition or agreement entered into by the banks with their customer, it said.
They further said a scrutiny in the accounts of the companies of the group was carried out by RBI and it was observed that the banks had failed to comply with provisions of one or more of the aforesaid directions issued by RBI and contravened provisions of the banking regulation act 1949. In furtherance to the same notice were issues to all fourteen banks including Jammu and Kashmir bank advising them to show cause as to why penalty should not be imposed for non compliance with the direction/contraventions of provisions of banking regulation act 1949.
RBI concluded that it warranted imposition of monetary penalty on fourteen banks including Jammu and Kashmir Bank.
