RBI Imposes Penalty On Lakshmi Vilas Bank
Mumbai: The Reserve Bank of India on Friday said it has imposed a penalty of Rs 3 crore on Lakshmi Vilas Bank for contravention of instructions on opening and operation of current accounts, among others.
The penalty on the bank, the RBI said, has been imposed for "contravention of instructions" relating to opening and operation of current accounts, extending bill discounting facilities to non-constituents and walk-in customers and non-adherence to KYC norms.
The RBI, however, added that the action on the bank 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 and its customers".
Earlier, the central bank had received a complaint regarding irregularities in bill discounting/ purchasing at one of the bank's branches.
An examination of the irregularities, and explanation from the bank was also obtained by the RBI.
On the basis of the examination of RBI and explanation furnished by the bank, a show cause notice was issued to the bank for violation of certain regulations and instructions.
After considering the bank's reply, as also, personal submissions, information submitted and documents furnished, the RBI said it came to the conclusion that the violations were substantiated and warranted imposition of monetary penalty.
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