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RBI imposes Rs 10L fine on Equitas SFB for selling products without approval

Press Trust of India  |  Mumbai 

Reserve has imposed Rs 10 lakh fine on Small (SFB) as the company was selling mutual fund, and without taking approval from the regulator.

The Reserve of India (RBI) has imposed, on March 1, 2018, a monetary penalty of Rs 1 million on Small Bank Limited for non-compliance with one of the licensing conditions stipulated by RBI, the said in a notification.

"This action is based on 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 RBI said.

The RBI said had undertaken the activities of rolling out mutual fund units, products, and without obtaining its prior approval.

Based on the information received and other relevant documents, a notice, dated January 18, 2018, was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the licensing conditions stipulated by the Reserve at the time of issuing banking license to the bank, it said further.

After considering the banks reply and oral submissions during the personal hearing, RBI came to the conclusion that the charge of non-compliance with one of the licensing conditions stipulated by RBI was substantiated and warranted imposition of monetary penalty, RBI gave as a background information about levy of this penalty on the bank.

Equitas Small Bank (ESFBL) had started its banking operations from Chennai in September 2016.

The RBI had issued licenses to ten entities in September 2015 to provide like accepting deposits and lending to unserved and underserved, including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 08 2018. 19:55 IST