- On Wednesday, the Reserve Bank of India levied a monetary penalty of Rs 1 crore on Reliance Jio Payments Bank Limited for failure in the appointment of MD & CEO
On Wednesday, the Reserve Bank of India levied a monetary penalty of Rs 1 crore on Reliance Jio Payments Bank Limited for failure to comply with RBI directives on timely submission of application in the event of re-appointment of Managing Director and Chief Executive Officer (MD & CEO) under Section 35B of the Banking Regulation Act, 1949 (the Act), as specified by the central bank.
“This penalty was levied under the provisions of section 47A(1)(c) read in section 46(4)(i) of the Act in the exercise of the powers conferred on RBI,” RBI said.
This action is focused on regulatory enforcement deficiencies and is not intended to determine the validity of any transaction or arrangement entered into with its customers by the bank, RBI further noted.
As per the RBI guidelines, in the case of the reappointment of MD & CEO of the bank four months before the date on which the term of the current role holders was to expire, Jio Payments Bank was required to apply to Section 35B of the Act. However, as RBI points out, less than a month before that date, the bank submitted the said application.
Also, a notice was sent to the bank urging it to explain the reason why a penalty should not be levied for its failure to comply with the RBI guidelines.
‘After considering the reply of the bank to the notice, the oral submissions made during the personal hearing and the review of the additional submissions, RBI concluded that the aforementioned charge of non-compliance with the RBI guidelines was identified and the monetary penalty was warranted,’ the central bank stated in a statement.
Jio Payments Bank is a payment bank in India that began operating in 2018. Payment banks in India are a particular category of banks that can take deposits and make payments, but can not offer loans, like credit cards, or other types of credit. Jio Payments Bank Limited, with a 70:30 stake, is a joint venture between Reliance Industries and the State Bank of India.
