Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
26 Mar 2024
Case Brief
By an order dated February 28, 2024, RBI imposed a monetary penalty of ₹50,000 on Chikkamagaluru District Cooperative Central Bank Ltd., Chikkamagaluru, Karnataka. The penalty was for non-compliance with NABARD directions on ‘Frauds - Guidelines for Classification, Reporting and Monitoring’. After a statutory inspection and show-cause process, RBI held that the charge of delay in reporting frauds to NABARD was sustained. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection by NABARD found supervisory non-compliance with NABARD directions on ‘Frauds - Guidelines for Classification, Reporting and Monitoring’. The bank’s reply and oral submissions were considered, but RBI sustained the charge of delay in reporting frauds to NABARD and concluded that a penalty was warranted under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the penalty and address the compliance weakness that led to delayed fraud reporting. The action does not itself impose an operating restriction, but it signals continued supervisory scrutiny and leaves RBI free to initiate further action if warranted.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 28 Feb 2024
- Effective From
- 28 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank