RBI slaps ₹2-cr penalty on Kotak Mahindra Bank

Source:- thehindubusinessline.com

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2 crore on Kotak Mahindra Bank for not complying with its directions on furnishing information about dilution of promoters’ shareholding.

The central bank, in a statement, said the penalty has been imposed in exercise of powers vested in it under the provisions of 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,” the RBI said. The statement said Kotak Mahindra Bank was directed to convey its commitment to achieve the dilution as per the timelines stipulated. However, the bank failed to comply and a show cause notice was issued to the bank as to why penalty should not be imposed for non-compliance with the said directions.

“After considering the reply received from the bank, submissions made by the bank during the personal hearing and the documents submitted by it, RBI came to the conclusion that the bank had failed to comply with the directions issued by RBI and decided to impose monetary penalty on the bank,” the central bank said.