Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
22 Feb 2024
Case Brief
RBI, by order dated February 14, 2024, imposed a monetary penalty of ₹50,000 on Hanamasagar Urban Co-operative Bank Ltd., Hanamasagar, Karnataka. The action was taken for non-compliance with RBI directions relating to frauds in UCBs and fraud reporting, after inspection found that the bank had not reported a fraud case to RBI within the stipulated timeline. RBI stated that the penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, and that it was based on deficiencies in regulatory compliance.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after inspection found that Hanamasagar Urban Co-operative Bank Ltd. had not reported a case of fraud to RBI within the prescribed time. The penalty was for non-compliance with RBI directions on fraud monitoring/reporting in UCBs and the related fraud reporting framework.
Operating Impact
The bank must absorb the monetary penalty and ensure future compliance with RBI’s fraud reporting directions. The order does not describe any business restriction, but it signals heightened supervisory scrutiny over the bank’s reporting controls and timelines.
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
- 14 Feb 2024
- Effective From
- 14 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank