The Reserve Bank of India has imposed a monetary penalty of Rs.1.00 lakh (Rupees one lakh only) on Uma Co-operative Bank Limited Vadodara (Gujarat), 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 non-adherence to Know Your Customer (KYC) norms.
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 reply as also personal submissions in the matter, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of the penalty.
The RBI has hiked its base rates recently in order to control the growing inflation. The earlier hikes have already leaded to the slowdown in loan business of the banks; it has also made it mandatory for all banks to increase their loan rates (home loan, personal loan, business loans, vehicle loan etc.)