Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
26 May 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Birdev Sahakari Bank Ltd, Ichalkaranji, Kolhapur under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated directives/guidelines relating to interbank (gross) exposure limit, interbank counterparty limit, unsecured advances limit, and KYC norms. After a show-cause process and consideration of the bank’s written and oral submissions, RBI concluded the violations were substantiated and warranted penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after concluding that the bank had violated directives/guidelines relating to interbank (gross) exposure limit, interbank counterparty limit, unsecured advances limit, and non-adherence to KYC norms. The bank had been issued a show cause notice and made written and oral submissions, but RBI found the violations substantiated and warranting penalty.
Operating Impact
The bank must absorb the financial penalty and address the compliance gaps identified by RBI, especially around exposure limits, unsecured lending controls, and KYC processes. The action does not indicate a business restriction, but it signals supervisory concern and the need for stronger compliance going forward.
Regulatory Basis
- Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank