RBI imposes monetary penalty on Maninagar Co-operative Bank Ltd., Ahmedabad, Gujarat
Case Brief
The Reserve Bank of India imposed a monetary penalty on Maninagar Co-operative Bank Ltd., Ahmedabad, Gujarat by order dated September 01, 2023. RBI said the bank failed to comply with directions on placement of deposits with other banks and on interest rate on deposits. The inspection also found breach of prudential inter-bank counterparty exposure limits and non-payment of interest on overdue term deposits at the required rate.
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The statutory inspection of the bank, with reference to its financial position as on March 31, 2022, found that it had breached the prudential inter-bank counterparty exposure limit and had not paid interest on overdue term deposits from maturity till repayment at the applicable savings deposit rate or contracted rate, whichever was lower. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the non-compliance with RBI directions was substantiated.
Severity Assessment
This is a monetary penalty of ₹1 lakh, which falls in the lowest monetary band and has no structural operating restriction.
The bank must absorb the monetary penalty and continue complying with RBI directions on inter-bank exposures and deposit-interest requirements. The release does not impose any new operational restriction, but it reinforces regulatory scrutiny of the bank's deposit and counterparty-exposure practices.
Published as Maninagar Co-operative Bank Ltd., Ahmedabad, Gujarat
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