BHUBANESWAR: The Reserve Bank of India (RBI) has imposed a penalty on Odisha State Co-operative Bank (OSCB) Ltd for non-compliance with certain provisions of the Banking Regulation Act, 1949.
Sources said a penalty of Rs 4 lakh has been imposed on OSCB Ltd for allegedly failing to dispose of certain non-banking assets and transfer eligible unclaimed amounts to the depositor education and awareness fund within the prescribed time.
“The bank has been fined for its failure to comply with the provisions of Section 9 and Section 26A of the Banking Regulation Act, 1949,” RBI said in a statement on Friday.
The action was taken after a statutory inspection of the bank conducted by the National Bank for Agriculture and Rural Development (NABARD) with reference to its financial position as of March 31, 2023.
Based on supervisory findings of contravention of statutory provisions and related correspondence, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed for contravention of provisions of the Banking Regulation Act.
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 the imposition of a monetary penalty.
“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Besides, the imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank,” the statement added.
Chief general manager of OSCB Kulamani Padhi feigned ignorance about the penalty. The managing director of the bank, Santosh Kumar Dash, was not available for comment.