The Reserve Bank of India (RBI) forced a monetary penalty of Rs 11 lakhs on the Jammu & Kashmir State Co-operative Bank Ltd, Srinagar, for breach of rules. This action is done on regulatory compliance and is not meant to pronounce upon the validity of any transaction or exchange inserted into the bank with its clients, the RBI said in a statement.

The lawful inspection of the bank was done by NABARD related to the bank’s financial position as of March 31, 2019, and the Inspection Report showed a violation of section 23 of the Banking Regulation Act, 1949 as the bank had opened branches without taking any permission from the RBI.

Due to this, a notice was issued to the bank asking them to show the reason as to why a penalty should not be forced for the breach. After examining the bank’s reply, RBI concluded that the previous charge of violation of section 23 read with section 56 of the Banking Regulation Act, 1949 was completed and warranted imposition of monetary penalty, the RBI said