Recorded RBI impact
Fine: Rs 13.0 L
Monetary penalty · Fresh imposition
Published by RBI
11 Aug 2021
Case Brief
RBI, by an order dated August 11, 2021, imposed a monetary penalty on Ahmednagar Merchant’s Cooperative Bank Limited, Ahmednagar, Maharashtra. The penalty was for contravention of / non-compliance with RBI directions issued to Urban Cooperative Banks on Frauds – Classification and Reporting. RBI said the action followed an inspection report for the bank’s financial position as on March 31, 2019, and was imposed after a show-cause notice, consideration of the bank’s replies, and oral submissions in personal hearing. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Why RBI Acted
Based on an inspection report for the bank's financial position as on March 31, 2019, RBI found contravention of / non-compliance with its directions to Urban Cooperative Banks on Frauds – Classification and Reporting. After issuing a show-cause notice and considering the bank's reply and oral submissions, RBI concluded the charge was substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and continue complying with RBI’s fraud classification and reporting directions. The action does not itself invalidate customer transactions, but it signals regulatory scrutiny over compliance controls and reporting practices.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 13.0 L
- Order Date
- 11 Aug 2021
- Effective From
- 11 Aug 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank