On Thursday, Private lender DCB Bank said that the Reserve Bank of India (RBI) has imposed a fine of Rs 22 lakh on the bank for violating the marketing norms of financial products. The RBI imposed the fine by an order dated on 28 October, 2020, said DCB Bank in a BSE filing.
“The RBI has…imposed a monetary penalty of Rs 22 lakh on DCB Bank for non-compliance with certain provisions of directions issued by RBI contained in the circular on ‘Marketing/distribution of mutual fund/insurance etc., products by banks’ dated November 16, 2009,” said the RBI order attached with the filing.
RBI said that the penalty has been imposed exercise of powers vested in the central bank under the Banking Regulation Act, 1949. “This 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,” it added.
The central bank has conducted an off-site examination of the records related with para-banking activity in the matter of default on the National Spot Exchange Limited (NSEL). The off-site examination and correspondence related to the matter revealed that the non-compliance with relevant directions issued by the RBI.
Thus, a notice was issued by the RBI advising the bank to show cause for not imposing penalty on the it for non-compliance with the directions.