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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹20 lakh on Vasai Vikas Sahakari Bank Ltd., Vasai, Maharashtra, following an order dated September 29, 2022, for non-compliance with RBI directions on fraud monitoring and reporting mechanisms. The penalty was imposed under the powers vested in RBI under Section 47 A (1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The action stems from a statutory inspection of the bank, which reviewed its financial position as of March 31, 2020, and examined the Risk Assessment Report and related correspondence. The inspection revealed that the bank had delayed reporting frauds, indicating a deficiency in regulatory compliance. A notice was issued to the bank seeking an explanation as to why the penalty should not be levied.
After considering the bank’s response and additional submissions, RBI concluded that the non-compliance with the directions was substantiated, warranting the imposition of the monetary penalty. The action is intended to ensure adherence to regulatory standards and does not comment on the validity of any transactions or agreements entered into by the bank with its customers.
[RBI]