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Penalty Imposed on TMB

Published on October 29, 2019
Current context: RBI imposed monetary penalty on Tamilnad Mercantile Bank Ltd (TMB) by an order dated 24th October 2019.
Penalty Imposed on TMB
  • RBI has imposed Rs 35 Lakh penalty on TMB for non-compliance of provisions issued by RBI on “Reserve Bank of India (Frauds classification and reporting by commercial banks and select FIs) directions 2016”.
  • RBI is vested with powers under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949 to impose such penalty.
  • The statutory inspection of the bank with reference to its financial position was done on 31st March 2017.
  • Based on the inspection report, show cause notice was issued to the bank asking why penalty should not be imposed for non-compliance with the directions.
  • RBI imposed the penalty considering the bank’s reply and oral submissions made in the personal hearing.

Question: 

Q.1 RBI has recently imposed a monetary penalty on Tamilnad Mercantile Bank Ltd (TMB) with the power vested to RBI under________?
a. Reserve Bank of India Act, 1934
b. Banking Regulation Act, 1949
c. Banking Regulation (Companies) Rules, 1949
d. Reserve Bank of India (Amendment and Misc. Provisions) Act, 1953
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