RBI Imposes Penalty On Odisha State Co-Operative Bank For Violation Of Banking Act

Bhubaneswar: The Reserve Bank of India (RBI) has imposed a penalty of Rs 4 lakh on the Odisha State Co-operative Bank (OSCB) Ltd for violation of Banking Regulation Act, 1949.

The RBI, in a statement on Friday, said the OSCB has been fined for its failure to comply with the provisions of Section 9 and Section 26A of the Banking Regulation Act, 1949.

“This action is based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Besides, imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank,” the statement said.

According to sources, the OSCB was penalised for allegedly failing to dispose of certain non-banking assets and transfer unclaimed amounts to the depositor education and awareness fund within the prescribed time.

The action was taken after NABARD carried out inspection of the bank to check its financial position as on March 31, 2023. Based on NABARD report which detected contravention of statutory provisions and related correspondence in that regard, a notice was issued to the OSCB to show cause why penalty should not be imposed.

After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter-alia, that the charges against the bank were sustained, warranting imposition of monetary penalty, the sources said.