By Raju Vernekar
Mumbai, Oct. 29:
Reserve Bank of India on Wednesday imposed a monetary penalty of Rs.1 crore on Reliance Jio Payments Bank Limited for non-compliance with RBI directions on timely submission of application in the case of re-appointment of Managing Director and Chief Executive Officer (MD & CEO) under Section 35B of the Banking Regulation Act, 1949, RBI said in statement.
“This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47A (1)(c) read with section 46(4)(i) of the Act. 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”, RBI further stated.
As per RBI guidelines, Jio Payments Bank was required to submit an application under Section 35B of the Act in the case of reappointment of MD & CEO of the bank four months prior to the date on which the term of the current position holders was to expire. However, as RBI states, the bank submitted the said application less than a month prior to that date.
In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for its failure to comply with the directions issued by RBI.
“After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI concluded that the aforesaid charge of non-compliance with RBI directions was established and warranted imposition of monetary penalty,” the RBI said in a statement. H. Srikrishnan is the MD & CEO of the Jio Payments Bank.
In another development, RBI imposed a monetary penalty of Rs. 22 lakh on DCB Bank Ltd. for non-compliance with certain provisions of directions issued by RBI contained in the circular on “Marketing/distribution of mutual fund/insurance etc, products by banks dated November 16,2009.
The penalty was imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. 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.
An off-site examination of the records pertaining to the para-banking activity of the bank was conducted by RBI in a matter related to default on the National Spot Exchange Limited (NSEL). The off-site examination and the related correspondence revealed non-compliance with above-mentioned directions issued by RBI. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the directions.
