Teachers' Co-operative Bank Limited, Udupi, Karnataka – Penalised
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on Teachers' Co-operative Bank Limited, Udupi, Karnataka under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). The penalty followed a show-cause notice and subsequent reply/submissions by the bank. RBI concluded that the bank had violated its directives relating to collection of third party account payee cheques and that the violations were substantiated.
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after concluding that the bank had violated its directives on collection of third party account payee cheques. The bank had responded to a show-cause notice and made written and personal submissions, but RBI found the violations substantiated and fit for penalty.
Severity Assessment
The action is a monetary penalty of Rs 5 lakh, which falls in the >Rs 2 lakh and <=Rs 10 lakh band, giving severity 2.
The bank is liable to pay the monetary penalty, but the release does not describe any additional operational restriction. The action serves as an enforcement finding on compliance with RBI directives regarding third-party account payee cheque collection.
Published as Teachers' Co-operative Bank Limited, Udupi, Karnataka
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