Tag: Show Cause Notice

RBI imposes Rs 90 lakh penalty on Vasai Vikas Sahakari Bank, BFSI News, ET BFSI

Banking & Finance

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The RBI on Tuesday said it has imposed a Rs 90 lakh penalty on Vasai Vikas Sahakari Bank, Maharashtra, for non-compliance with certain directions, including on classification of loans as NPAs, and other directions. In a statement, the Reserve Bank said the bank had not complied with its directions on ensuring end-use of funds in borrowal accounts and classification of loans/ advances as non-performing assets, specific direction of RBI for ensuring that the bank’s balance sheet and profit and loss account are signed by at least three of its directors.

This was revealed following the statutory inspection of the bank with reference to the bank’s financial position as of March 31, 2019, the Inspection Report pertaining thereto and examination of all related correspondence, the central bank said.

The penalty was imposed after considering the bank’s replies to a show-cause notice and oral submissions made during the personal hearing, the RBI said.

In another statement, the RBI said it has imposed a monetary penalty of Rs 7 lakh on The Citizens Urban Co-operative Bank, Jalandhar, Punjab for “non-adherence with/violation” of certain directions related to non-identification of NPAs, wrong classification of assets and inadequate provisions made due to the wrong classification of assets.

In both cases, the RBI said, penalities were based on the deficiency in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by them with their customers.



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McNally Bharat gets lender’s notice on ‘wilful defaulter’ tag, BFSI News, ET BFSI

Banking & Finance

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McNally Bharat Engineering (MBE) of financially stressed Williamson Magor group has received a notice from one of its lenders to show cause as to why the company or its promoters and directors should not be included in the list of wilful defaulters as per the Reserve Bank of India’s (RBI) guidelines.

In a stock exchange filing on Monday, MBE informed that it received the show-cause notice from the lender on July 30, and the company is taking necessary action in this regard and will submit a “suitable reply” to the lender.

The group got a major relief in October 2019, when the Kolkata bench of the National Company Law Tribunal (NCLT) had allowed a financial creditor to withdraw its insolvency petition against MBE even after admitting the petition to order the commencement of the insolvency resolution process for the company. The matter had been settled with Trinetra Electronics, the creditor, out of court as it was a small amount.

Apart from Trinetra Electronics, a few financial creditors, including Tata Capital Financial Services, and some operational creditors had also filed insolvency petitions against McNally Bharat.

According to McNally’s annual report, its bankers are: State Bank of India, Punjab National Bank, ICICI Bank, Union Bank of India, Bank of India, IDBI Bank, Axis Bank, Bank of Baroda and Canara Bank, among others.



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ED issues show cause notice to WazirX for transactions involving cryptocurrencies worth Rs 2,790 cr, BFSI News, ET BFSI

Personal Finance

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The Enforcement Directorate has issued show cause notice to WazirX Cryptocurrency exchange and its directors Nischal Shetty and Sameer Hanuman Mhatre under Foreign Exchange Management Act for transactions involving cryptocurrencies worth Rs 2790.74 crore.

ED had initiated FEMA investigation into Chinese owned illegal online betting applications and during the course of the investigation ED observed that the accused Chinese nationals had laundered proceeds of crime worth Rs 57 crore approximately by converting the INR deposits into crypto-currency Tether (USDT) and then transferring the same to Binance (exchange registered in Cayman Islands) Wallets based on instructions received from abroad.

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