The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 crore on Nainital Bank for its failure to fully automate the non-performing asset (NPA) identification process, despite specific directions issued in this regard.
“This penalty has been imposed in exercise of powers vested in the RBI under the provisions of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid direction issued by the RBI.
“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 with its customers,” the central bank said in a statement.
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Banking Regulation Act, 1949:
It is a legislation in India that regulates all banking firms in India.
The Act gives the Reserve Bank of India (RBI) the power to:
license banks
have regulation over shareholding and voting rights of shareholders supervise the appointment of the boards and management
regulate the operations of banks
lay down instructions for audits
control moratorium, mergers and liquidation
issue directives in the interests of public good and on banking policy
impose penalties
Nainital Bank:
Founded on: 1922
Headquarters: Nainital, Uttarakhand, India
MD & CEO: Dinesh Pant
Parent: Bank of Baroda
It is a scheduled commercial bank. The bank has over 139 branches in Rajasthan, Delhi and Haryana. It has expanded to Uttar Pradesh and Uttarakhand.
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