RBI imposed a fine of ₹ 1.31 crore on PNB, cancelled the license of one bank

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The Reserve Bank of India (RBI) has imposed a fine of Rs 1.31 crore on Punjab National Bank (PNB). This fine has been imposed for non-compliance of certain instructions related to KYC and ‘Loans and Advances’. The Reserve Bank said that it conducted a statutory inspection with respect to the financial position of the bank as on March 31, 2022. After that a notice was issued to the bank. After considering the reply of Punjab National Bank to the notice, RBI found that PNB (Punjab National Bank) sanctioned working capital demand loans to 2 state government-owned corporations in lieu of the amount received from the government by way of subsidy / refund / reimbursement.

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The Reserve Bank said that PNB also failed to maintain records related to the identity and address of customers obtained during the business relationship in some accounts. However, the central bank said that this fine imposed on PNB is based on deficiencies in regulatory compliance and is not intended to affect the validity of any transaction or agreement entered into by the bank with its customers.

Also Read: Big Relief for LIC Policy Holders! Policy surrender money will be received within 48 hours, know the details

Shimsha Sahakar Bank regular license cancelled

Apart from this, RBI has canceled the license of Karnataka-based Shimsha Sahakara Bank Niyamiti, Maddur due to its deteriorating financial condition. RBI said in a statement that the bank will stop banking operations after the end of working hours on July 5, 2024. The Registrar of Cooperative Societies of Karnataka has also been requested to issue an order to close this cooperative bank and appoint a liquidator for the bank.

Every depositor of Shimsha Sahakar Bank Niyam will be entitled to get a claim amount of up to Rs 5 lakh on his deposits from the Deposit Insurance and Credit Guarantee Corporation (DICGC). Let us tell you that if a bank collapses, becomes bankrupt or its license is canceled, then the depositor’s total deposit of up to Rs 5 lakh in that bank is safe.

Continuation of operations of the bank is detrimental to the interests of depositors

RBI has said that about 99.96 percent of the depositors of Shimsha Sahakar Bank Nigam are entitled to receive the full amount of their deposits from DICGC. The bank does not have adequate capital and earning prospects. Its continuation of operations is detrimental to the interests of its depositors. According to the statement, “Due to its current financial position, the bank will be unable to make full payment to its depositors.”

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