*J&K Bank Fined ₹2.5 Crore for Failure to Comply with RBI Directions...
Srinagar, June 24 - The Reserve Bank of India (RBI) has imposed a significant penalty of ₹2.5 crore on Jammu and Kashmir Bank due to alleged non-compliance with specific directions and regulations.
According to officials, the penalty is related to the bank's failure to adhere to RBI's guidelines regarding the central repository of large common exposures across banks, loans, advances, and statutory and other restrictions. The bank also did not ensure the timely implementation and strengthening of SWIFT-related operational controls, the official stated.
The non-compliance issue was identified during an inspection conducted on March 31, 2021. The bank was found to have extended term loans to a corporation without conducting proper due diligence verification. Additionally, it failed to ensure that the repayment or servicing of these loans originated from budgetary resources.
Furthermore, the bank created financial/non-financial messages in SWIFT without accurately reflecting the underlying transactions in the Core Banking System (CBS), according to the official.
In the meantime, the RBI has also penalized Axis Bank with ₹30 lakhs and Bank of Maharashtra with ₹1.45 crore for non-adherence to certain banking norms.
