RBI imposes Rs 22 lakh fine on DCB Bank for violating marketing norms
NEW DELHI: Private sector lender DCB Bank on Thursday said RBI has imposed a fine of Rs 22 lakh on the bank for violating marketing norms for financial products.
The Reserve Bank imposed the penalty by an order dated October 28, DCB Bank said in a BSE filing.
"The RBI has imposed a monetary penalty of Rs 22 lakh on DCB Bank for non-compliance with certain provisions of directions issued by RBI contained in the circular on 'Marketing/distribution of mutual fund/insurance etc., products by banks' dated November 16, 2009," the RBI order attached with the filing said.
The central bank said the penalty has been imposed in exercise of powers vested in RBI under the Banking Regulation Act, 1949.
"This action is based on the 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," RBI said.
RBI had conducted an off-site examination of the records related to para-banking activity in a matter of default on the National Spot Exchange Ltd (NSEL).
The off-site examination and the related correspondence revealed non-compliance with the relevant directions issued by RBI.
Thus, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the directions, the RBI order said.
"After considering the bank's reply to the notice, oral submissions made in the personal hearing and examination of additional submissions, RBI concluded that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty," it said.