The Reserve Bank of India has imposed a monetary penalty of Rs 1.2 crore on Karnataka Bank Limited for non-compliance of asset classification, divergence & provisioning norms.
On Thursday, the Central Bank said in a statement, "The penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) of the Banking Regulation Act, 1949. This action is based on the deficiencies in regulatory compliance & is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers".
According to the central bank, the statutory inspection of the bank with reference to its financial position as on March 31, 2017, & as on March 31, 2018, & the Risk Assessment Reports (RAR) pertaining thereto revealed, inter-alia, non-compliance with the directions issued by RBI.
Earlier, a notice was issued to the bank advising it to show cause as to why penalty shouldn't be imposed on it for non-compliance with the directions.
After considering the bank's reply to the notice, oral submissions made in the personal hearing & examination of additional submissions, RBI concluded that the charges of non-compliance with RBI directions warranted imposition of monetary penalty, according to a release.
This action is based on the deficiencies in regulatory compliance & isn't intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
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