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RBI Imposes Rs 56 Lakh Penalty On Nainital Bank For Violating Norms

RBI imposed the penalty on non-compliance of norms

The Reserve Financial institution of India (RBI) on Friday stated it has imposed a penalty of Rs 56 lakh on The Nainital Financial institution, Uttarakhand, for non-compliance with sure norms associated to classification of non-performing property and frauds.

The central financial institution had performed a Statutory Inspection for Supervisory Analysis (ISE) of the lender close to its monetary place as on March 31, 2019 and located non-compliance with sure instructions.

There was a divergence between financial institution’s reported NPAs and NPAs assessed through the inspection on account of failure to categorise sure borrower accounts as NPA. There was additionally a failure to reveal materials divergences referring to asset classification and provisioning recognized by the RBI, regardless of exceeding the outlined threshold, within the Notes to Accounts, the RBI stated in an announcement.

There was additionally a failure on the a part of the financial institution to report frauds as per the RBI instructions. The RBI, nonetheless, stated the motion towards The Nainital Financial institution is predicated on the deficiencies in regulatory compliance and isn’t meant to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its clients. 

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