Federal Bank has been slapped with a fine of Rs. 5.72 crore because the private lender failed to make sure that no incentive (cash or non-cash) was paid to its staff engaged in insurance broking/corporate agency services by the insurance company, RBI has said in a press release today.
In addition, the RBI fined Gurugram-based Dhani Loans and Services ₹7.06 lakh for failing to follow the "Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016". RBI has said in a separate release that the monetary penalty has been imposed due to the company’s failure to ensure categorization of customers based on risk assessment and risk perception.
For the above-said banks, RBI has said the 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.
The RBI also cancelled Shri Anand Co-operative Bank Ltd.'s license on July 7, 2022, and the bank ceased to conduct banking operations as of the close of business on July 7, 2022. The license has been cancelled as the bank does not have adequate capital and earning prospects, the bank has failed to comply with the requirements of Section 56 of the Banking Regulation Act, 1949, the continuance of the bank is prejudicial to the interests of its depositors, the bank with its present financial position would be unable to pay its present depositors in full; and public interest would be adversely affected if the bank is allowed to carry on its banking business any further, said RBI. The RBI has stated that the bank is prohibited from conducting the business of ‘banking’ which includes, among other things, acceptance of deposits and repayment of deposits as defined in Section 56 of the Banking Regulation Act, 1949 with immediate effect.
