RBI has imposed a penalty of Rs 39 crore on Paytm Payments Bank. Apart from this, the Central Bank has also imposed penalty on 3 cooperative banks of Maharashtra.
RBI Action: Reserve Bank of India has taken action against Paytm Payments Bank and three cooperative banks. All three cooperative banks are from Maharashtra. Their names are Janata Urban Co-operative Bank Limited (Y), The Jawahar Urban Co-operative Bank Limited (Palghar) and Annasaheb Magar Co-operative Bank (Pune). RBI has given this information through a press release on Thursday.
Why was fine imposed on Paytm Payment Bank?
Reserve Bank of India has imposed a penalty of Rs 5.39 crore on Paytm Payment Bank Limited. According to the central bank, the bank failed to comply with certain provisions of KYC, 2016, RBI guidelines on “Licensing of Payments Banks”, “Maximum End of Day Balance Increase” and reporting of cyber security incidents.
Fine imposed on these cooperative banks
Janata Urban Co-operative Bank Limited has failed to comply with regulations related to “Fraud Monitoring and Reporting Mechanism”. Therefore, a fine of Rs 1 lakh has been imposed on the bank. A penalty of Rs 1 lakh has been imposed on The Jawahar Urban Co-operative Bank Limited for violating KYC related rules. Whereas, a monetary fine of Rs 4 lakh has been imposed on Annasaheb Magar Co-operative Bank for non-profitable activities. The bank did not comply with the Reserve Bank guidelines on KYC, “Maintenance of Deposit Accounts – Primary Co-operative Banks” and “Income Recognition, Asset Classification, Provisioning and other related matters”.
Customers will not be affected
The Reserve Bank has taken action against all the banks under Section 47A (1) (c) read with Sections (46) (4) (i) and 56 of the Banking Regulation Act 1949. It has also been clarified that this action has been taken in view of the shortcomings of the banks. This will not have any impact on customers.