Reserve Bank of India imposes monetary penalty on Tamilnad Mercantile Bank Limited
Case Brief
On June 19, 2018, RBI imposed a monetary penalty of ₹60 million on Tamilnad Mercantile Bank Limited. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949 for contravention of the Master Directions on Issue and Pricing of Shares dated April 21, 2016. RBI said the bank failed to adhere to these directions while issuing bonus shares to certain non-resident entities.
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949. The action was taken because Tamilnad Mercantile Bank Limited did not comply with the Master Directions on Issue and Pricing of Shares dated April 21, 2016 when issuing bonus shares to certain non-resident entities.
Severity Assessment
The penalty is ₹60 million, which is above ₹20 lakh, so the monetary band sets severity 4.
Tamilnad Mercantile Bank Limited must bear the penalty and the action serves as an enforcement signal for compliance with RBI's share issuance and pricing directions. The release does not describe any additional operational restriction, but it records a regulatory finding of non-compliance affecting the bank and the non-resident entities involved in the bonus share issuance.
Published as Tamilnad Mercantile Bank Limited
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Tamilnad Mercantile Bank Limited
Monetary penalty · Fresh imposition
Tamilnad Mercantile Bank Limited
Monetary penalty · Fresh imposition
Tamilnad Mercantile Bank Ltd.
Monetary penalty · Fresh imposition
Tamilnad Mercantile Bank Ltd.
Monetary penalty · Fresh imposition
Tamilnad Mercantile Bank Limited
Monetary penalty · Fresh imposition
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