Dhanlaxmi Bank, ESAF Bank pulled up by RBI, slapped fine of RS1.20 crore, Rs 30 lakh

Kochi: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs.1. 20 crore on Dhanlaxmi Bank for various violations inluding for having sanctioned loans to certain borrowers against pledge of gold ornaments and jewellery for non-agricultural purposes exceeding 75 per cent of the value of gold ornaments and jewellery, offered interest rate applicable to normal term deposits on certain senior citizen term deposits instead of higher rate of interest applicable to such deposits., for not having obtained PAN or Form 60 for certain term deposit accounts (exceeding fifty thousand rupees), and allotted multiple Customer Identification Code to certain individual customers instead of a Unique Customer Identification Code (UCIC) to each customer. said an RBI releas.

These violations were detected during the central bank's statutory Inspection for Supervisory Evaluation (ISE 2022) with reference to its financial position as on March 31, 2022. The examination of the Risk Assessment Report/Inspection Report pertaining to ISE 2022, and all related correspondence in that regard, revealed, inter alia, non-compliance with the respetiver directions by the bank, to the extent it (1) sanctioned loans to certain borrowers against

Consequently,a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for the failure to comply with the directions issued by RBI

Since the clarification of the bank was not statisfatory, the penalty was imposed on the bank in exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act 1949.

ESAF fined Rs 30 lakh

In yet another case, the RBI has slapped a fine of of Rs. 29.55 Lakh on ESAF Small Finance Bank Limited for having allowed its certain Basic Savings Bank Deposit (BSBD) account holders to open savings bank deposit account; and failed to close certain savings bank deposit accounts within thirty days from the date of opening of BSBD accounts for such customers.

Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions..

Since the clarification of the bank was not statisfatory, the penalty was imposed on the bank in exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act 1949.