RBI imposed Penalty on Punjab Gramin Bank
In a significant regulatory development, the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹36.40 lakh on Punjab Gramin Bank, headquartered in Kapurthala, Punjab. The penalty, announced on December 26, 2024, was levied for the bank’s contravention of provisions under Section 26A read with Section 51(1) of the Banking Regulation Act, 1949.
The penalty was imposed under the powers granted to the RBI by Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act. This decision follows a statutory inspection conducted by the National Bank for Agriculture and Rural Development (NABARD) based on the bank’s financial position as of March 31, 2023.
Key Findings and Violations
During the inspection, supervisory findings revealed that Punjab Gramin Bank had failed to transfer eligible unclaimed amounts to the Depositor Education and Awareness (DEA) Fund within the prescribed timeline. This failure constituted a contravention of the statutory provisions outlined in the Banking Regulation Act.
In response to these findings, the RBI issued a show-cause notice to the bank, asking it to explain why a penalty should not be imposed. After reviewing the bank’s written reply and considering oral submissions made during a personal hearing, the RBI concluded that the violations were substantiated, warranting the imposition of a monetary penalty.
Clarifications from the RBI
The RBI clarified that this action was based solely on deficiencies in the bank’s regulatory compliance. It is not intended to question the validity of any transactions or agreements entered into by the bank with its customers. Furthermore, this penalty is without prejudice to any other actions that the RBI may choose to take against the bank in the future.
This penalty serves as a reminder for all banking institutions to adhere strictly to regulatory guidelines and maintain compliance with statutory provisions.
