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RBI imposed a fine of lakhs of rupees on these two banks, this is the reason

RBI: The Reserve Bank of India (RBI) on Monday said it has imposed a fine of Rs 27.5 lakh on Dhanlaxmi Bank for violating norms related to the ‘Depositors Education and Awareness Fund Scheme’. The central bank has also imposed a fine of Rs 20 lakh on Gorakhpur-based multi-state primary cooperative bank of Northeast (NE) and Middle Eastern (EC) railway employees for violating certain norms.

The RBI said in a statement that Dhanlaxmi Bank has been fined for contravention of a section of the Banking Regulation Act, 1949. Based on the financial position of the Multi-State Primary Co-operative Bank of Northeast (NE) and Middle Eastern (EC) Railway employees, specific instructions issued under the Supervisory Action Framework (SAF) in the Bank’s Inspection Report as on March 31, 2019, the statement said. Found out about non-compliance or violations.

“The RBI, after considering the bank’s reply and oral submissions during the personal hearing, came to the conclusion that the aforesaid allegation of non-compliance or contravention of its directions was substantiated and therefore warranted imposition of monetary penalty,” the central bank said.

Show cause notice

On the basis of the report, a show cause notice was issued to the cooperative bank. RBI, however, added that the penalty is based on deficiencies in regulatory compliance and there is no question mark on the validity of any transaction or agreement entered into by the co-operative bank with its customers.

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Shivam Bangwal

Shivam Bangwal is a young entrepreneur who hails from Uttarakhand. Shivam is a professional full time Digital Marketing and PR expert with a post graduation degree of Master's of Computer Applications. He is a founder of Youthistaan, People News Chronicle, Branding Panther and Digital Leader.

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