The Reserve Bank of India on Friday said it has imposed a monetary penalty of Rs 2 crore on Bank of Maharashtra for non-compliance with certain direction on fraud classification and reporting.
The RBI has imposed, by an order dated February 25, 2021, a monetary penalty of Rs 2 crore on Bank of Maharashtra (the bank) for contravention of / non-compliance with certain provisions of the directions contained in the Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016, the central bank said in a release.
The bank also violated the RBI directions on Concurrent Audit System in Commercial Banks, disclosure of customer complaints and unreconciled balances on account of ATM transactions, and Micro, Small and Medium Enterprises (MSME) Sector - Restructuring of Advances.
This penalty has been imposed in exercise of powers vested in the RBI under the Banking Regulation Act, 1949.
"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," the RBI said.
It had conducted a statutory inspection of the bank on its financial position as of March 31, 2018, and March 31, 2019, and the Risk Assessment Reports (RARs) which revealed violations, it added.
The regulator said it also asked the lender as to why a penalty should not be imposed on it.
After considering the bank's replies to the notices, oral submissions made in the personal hearing and examination of additional submissions made by it, the central bank came to the conclusion that the charges of non-compliance with the RBI directions were substantiated and warranted imposition of monetary penalty.
