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Bhatpara-Naihati Cooperative Bank Ltd

Co-operative bankNorth 24 Parganas, West Bengal

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 4.00 L

Monetary penalty · Fresh imposition

S2

Published by RBI

26 Sept 2022

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 4.00 lakh on Bhatpara-Naihati Cooperative Bank Ltd., North 24 Parganas, West Bengal, for contravention of RBI directions applicable to urban cooperative banks. The directions cited were 'Exposure Norms and Statutory / Other Restrictions – UCBs' and 'Management of Advances – UCBs'. RBI said inspection reports based on the bank's financial positions as of March 31, 2019 and March 31, 2020 revealed non-compliance with prudential inter-bank exposure norms at both gross and counterparty levels, as well as with directions regarding sanction of gold loans. After considering the bank's reply and submissions, RBI concluded that the charges were substantiated and warranted the penalty. RBI also clarified that the action was based on regulatory compliance deficiencies and was not meant to pronounce on the validity of any customer transaction or agreement.

Why RBI Acted

Capital & exposure normsLending normsReporting & disclosure

RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 for contravention/non-adherence with directions issued to urban cooperative banks on 'Exposure Norms and Statutory / Other Restrictions – UCBs' and 'Management of Advances – UCBs'. The inspection reports for financial positions as on March 31, 2019 and March 31, 2020 found non-compliance with prudential inter-bank exposure limits at both gross and counterparty level, and with directions relating to sanction of gold loans. After show-cause proceedings and hearing, RBI concluded the charges were substantiated.

Operating Impact

The bank must absorb the monetary penalty and address the compliance gaps identified by RBI. The order has no stated operational restriction beyond the fine, but it signals continuing supervisory scrutiny over exposure limits and lending practices, especially inter-bank exposure and gold loan sanctions.

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 4.00 L
Order Date
22 Sept 2022
Effective From
22 Sept 2022
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank