The RBI on Friday said it has imposed a monetary penalty of Rs 1.31 crore on Punjab National Bank for non-compliance with certain directions related to KYC and ‘loans and advances’.
The Reserve Bank said it conducted a statutory inspection of the bank concerning its financial position as on March 31, 2022.
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A notice was issued to the bank.
After considering the bank’s reply to the notice, RBI said it found that PNB sanctioned working capital demand loans to two state government-owned corporations against amounts receivable from the government by way of subsidies/ refunds/ reimbursements.
Also, the public sector lender failed to preserve the records about the identification of customers and their addresses obtained during business relationships in certain accounts, RBI said.
The central bank, however, added the penalty is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreements entered into by the bank with its customers.
RBI Cancels Licence of Shimsha Sahakara Bank Niyamitha
In another development, RBI has cancelled the licence of Shimsha Sahakara Bank Niyamitha, Maddur (Karnataka) in the wake of its worsening financial position.
Consequently, the bank ceases to carry on banking business, with effect from the close of business on Friday (July 05, 2024), the RBI said in a statement.
The Registrar of Cooperative Societies, Karnataka has also been requested to issue an order for winding up the bank and appoint a liquidator for the bank.
On liquidation, every depositor would be entitled to receive a deposit insurance claim amount of his/her deposits up to Rs 5 lakh from Deposit Insurance and Credit Guarantee Corporation (DICGC).
As per the data submitted by the bank, RBI said about 99.96 per cent of the depositors are entitled to receive the full amount of their deposits from the DICGC.
Giving details, RBI further said the bank does not have adequate capital and earning prospects, and its continuance is prejudicial to the interests of its depositors.
“The bank with its present financial position would be unable to pay its present depositors in full,” it added.
As of March 31, 2024, DICGC has already paid Rs 11.85 crore of the total insured deposits based on the willingness received from the concerned depositors of the bank.
(With PTI inputs)
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