RBI imposes penalty on Lakshmi Vilas and Syndicate Bank
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In the case of LVB, the RBI said the penalty has been imposed for non-compliance with certain provisions of directions issued by it on ‘Income Recognition and Asset Classification (IRAC) norms’.
In the case of Syndicate Bank, the penalty has been imposed for non-compliance with the RBI’s directions on (i) frauds classification and reporting and (ii) innovative housing loan products – upfront disbursal of housing loans.
The RBI said LVB’s statutory inspection with reference to its financial position as on March 31, 2017, revealed, inter alia, non-compliance with directions issued by it on IRAC norms.
“Based on the inspection report, 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.
“After considering the bank’s reply to the notice and examination of additional submission, the RBI concluded that the aforesaid non-compliance warranted imposition of monetary penalty,” the RBI said in a statement.
The RBI had placed LVB under prompt correction action framework late last month, citing its high net non-performing assets, insufficient capital to risk-weighted assets ratio and common equity tier-I capital, and negative return on assets for two consecutive years.The RBI said the return on fraud filed by Syndicate Bank with it revealed that the bank had failed to comply with certain provisions of directions issued by it on fraud reporting and disbursal of housing loans. “Based on the findings, a notice was issued to the bank, advising it to show cause as to why penalty should not be imposed for non-compliance with the directions issued by RBI.
“After considering the reply received from the bank and submissions made during the personal hearing, the RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty,” the central bank said.#casansaar (Source - RBI, The Hindu Business Line)
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