RBI Imposes ₹1.16 Crore Penalty on 15 Financial Institutions for Regulatory Violations
The Reserve Bank of India (RBI) has levied penalties totaling ₹1.16 crore on 15 financial institutions, including cooperative banks, NBFCs, housing finance companies (HFCs), and an asset reconstruction company (ARC), for non-compliance with regulatory directions. The highest penalty of ₹52.70 lakh was imposed on Maharashtra-based Phoenix ARC Pvt Ltd.
Phoenix ARC was fined for settling dues of borrowers with outstanding principal amounts exceeding ₹1 crore without prior board approval.
Among the cooperative banks penalized, Karnataka-based South Canara District Central Cooperative Bank and Mysore and Chamarajnagar DCC Bank were fined ₹5 lakh and ₹1 lakh, respectively, for sanctioning director-related loans, violating the Banking Regulation Act. Gujarat’s Porbandar Commercial Cooperative Bank and Santrampur Urban Cooperative Bank were fined for KYC violations, while Himachal Pradesh’s Kangra Central Cooperative Bank was fined ₹25 lakh for extending loans beyond its operational limits.
Karnataka Gramin Bank faced a ₹1 lakh penalty for failing to classify certain loan accounts as NPAs. Citizens Urban Cooperative Bank in Jalandhar was fined ₹15 lakh for exceeding regulatory lending limits and offering higher deposit rates than SBI.
Among NBFCs, Tamil Nadu-based Savery Transport Finance was fined ₹5 lakh for charging interest rates higher than those stated in agreements. Purvaja Fincap faced a ₹50,000 penalty for premature debt redemption. New Delhi-based UCA Finvest was fined ₹4.10 lakh for violating its registration conditions.
HFCs, including Mahindra Rural Housing Finance and Habitat Micro Build India, were penalized for governance lapses.
RBI clarified that the penalties address regulatory deficiencies and do not impact the validity of transactions with customers.
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