The Reserve Bank of India on Monday imposed a fine of Rs 2 crore on private lender RBL Bank for violating certain regulatory directives and failing to comply with the provisions of the Banking Regulation Act. After a supervisory evaluation of RBL Bank, the private bank was found to be inconsistent with the provisions of Clause (b) of Subsection (2) of Section 10A of the Banking Regulation Act of 1949, said the Reserve Bank of the Indian in a statement.

The supervisory authority decided to impose a fine after verifying that the private bank violated certain regulatory directives and did not comply with the provisions of the Banking Regulation Law regarding the opening of five savings accounts in the name of a cooperative bank and the composition of the board of directors. The Reserve Bank of India has issued a notice to the bank advising it to prove the reason against the sanction. He also requested an explanation for the breach of the regulations.

"After considering the bank's reply to the show-cause notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the aforesaid charge of contravention of/non-compliance with the directions /Act were substantiated and warranted imposition of monetary penalty on the bank," the RBI said in its statement. The central bank further informed that the action was based on deficiencies in regulatory compliance and would not affect the validity of any transaction or agreement entered into by the bank with its customers.