In a recent development, the Reserve Bank of India (RBI) has taken strict action against Mumbai’s SVC Co-operative Bank Ltd., imposing a hefty fine of ₹3.3 lakh for non-compliance with regulatory directives. The penalty stems from the bank’s inappropriate practice of charging an annual maintenance fee for ATM cards in Basic Savings Bank Deposit Accounts (BSBDAs), a clear violation of the RBI’s guidelines.
Unveiling the Regulatory Violation
The fine was initiated following a comprehensive inspection of SVC Co-operative Bank’s financial standing as of March 31, 2021, coupled with subsequent risk assessment reports. During this scrutiny, it came to light that the bank was imposing annual maintenance charges on ATM cards associated with BSBDAs.
Upon discovery of this irregularity, the RBI issued a notice to the bank, seeking an explanation for its actions and questioning why a penalty should not be imposed for disregarding the central bank’s explicit instructions. After evaluating the bank’s response, the RBI determined that the non-compliance was indeed established, justifying the imposition of the financial penalty.
RBI’s Official Stand on the Matter
In response to the situation, the RBI released a statement clarifying that the penalty is a consequence of the bank’s failure to adhere to regulatory standards. Importantly, the action does not pass judgment on the validity of any transactions or agreements between the bank and its customers. Instead, it focuses on the deficiencies in regulatory compliance.
Wake-up Call for the Banking Sector
This stern move by the RBI serves as a wake-up call for all banking institutions, emphasizing the critical importance of strict adherence to regulatory guidelines, especially in customer-centric operations. It underscores the central bank’s unwavering commitment to upholding the integrity of the banking system and safeguarding the interests of consumers.
