A recent press report said that the Reserve Bank of India has imposed a monetary penalty of Rs.1.00 lakh (Rupees one lakh only) on Pragati Sahakari Bank Limited, Vadodara, in exercise of powers vested in it under the provisions of Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) for violations of Reserve Bank of India directives/instructions/guidelines relating to share linking norms, single borrower exposure ceiling and Anti Money Laundering (AML) guidelines for reporting the cash transactions above ` 10.00 lakh to Financial Intelligence Unit-India (FIU-IND), New Delhi.
The Reserve Bank of India had issued a show cause notice to the bank in response to which the bank submitted a written reply. After considering the facts of the case and the bank’s replies in the matter, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of the penalty.
The banks are already facing the heat of the hike in the base rates by the regulator which has lead to the slowdown in their loan business. The hike in base rates has made it mandatory for all banks to increase their loan rates (home loan, personal loan, business loans, vehicle loan etc.)