RBI imposes monetary penalty on DCB Bank Ltd
This penalty has been imposed in the exercise of powers vested in RBI conferred under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) of the Banking Regulation Act, 1949.
On March 13, 2024, the Reserve Bank of India (RBI) ordered a monetary penalty of ?63,60,000/- (Rupees Sixty three lakh sixty thousand only) on DCB Bank Ltd. for failing to comply with certain directives issued by RBI regarding Interest on Advances. This penalty has been imposed under the provisions of section 47 A (1) (c) read with sections 46 (4) (i) of the Banking Regulation Act, 1949, which vest the RBI with the power to take such action.
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The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI regarding its financial position as of March 31, 2022. The bank failed to reset the interest rates at the prescribed periodicity in certain MCLR-linked floating rate advances and also failed to benchmark the interest rate of certain floating rate retail loans and floating rate loans to MSMEs to an external benchmark lending rate.
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The action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreements entered into by the bank with its customers. Further, the imposition of a monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.
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