Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Jul 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Baidyabati-Sheoraphuli Co-operative Bank Ltd., Dist- Hooghly, West Bengal, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was levied after RBI found violations of extant guidelines relating to the limit of Non-SLR investment, individual and group exposure ceilings for lending operations, and Know Your Customer (KYC) related instructions, following a show-cause notice, the bank’s reply, and a personal hearing.
Why RBI Acted
The RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after finding that the bank had violated extant guidelines on the limit of Non-SLR investment, individual and group exposure ceilings for lending operations, and Know Your Customer (KYC) instructions. The bank had received a show-cause notice, submitted a reply, and was heard by the Regional Director before the violations were found substantiated.
Operating Impact
The bank must absorb the penalty and address the compliance gaps identified by RBI. The action does not impose an operational restriction, but it signals regulatory scrutiny over its investment, lending exposure, and KYC compliance practices.
Regulatory Basis
- Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank