RBI imposes monetary penalty on Pune Municipal Corporation Servant’s Co-operative Urban Bank Limited, Pune, Maharashtra
Case Brief
RBI, by order dated November 23, 2023, imposed a penalty of Rs 1.00 lakh on Pune Municipal Corporation Servant’s Co-operative Urban Bank Limited, Pune, Maharashtra. The bank was found to have failed to conduct the annual review of inoperative/dormant accounts, contrary to RBI directions on maintenance of deposit accounts for primary (urban) co-operative banks, after a statutory inspection and subsequent notice/show-cause process.
Following statutory inspection with reference to the bank’s financial position as on March 31, 2022, RBI found that Pune Municipal Corporation Servant’s Co-operative Urban Bank Limited had not conducted the required annual review of inoperative/dormant accounts, violating RBI directions on ‘Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks’. After considering the bank’s reply and oral submissions, RBI concluded that the non-compliance was substantiated and imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Severity Assessment
A monetary penalty of Rs 1 lakh falls in the lowest monetary band, and there is no additional operational restriction beyond the fine.
The bank must absorb the monetary penalty and ensure future compliance with RBI directions on deposit-account maintenance, especially annual review of dormant/inoperative accounts. No customer transaction is declared invalid, but the bank faces regulatory scrutiny for the lapse.
Published as Pune Municipal Corporation Servant’s Co-operative Urban Bank Limited
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