Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
11 Oct 2018
Case Brief
The Reserve Bank of India imposed a monetary penalty on Hardoi Zila Sahakari Bank Ltd., Hardoi, Uttar Pradesh under the Banking Regulation Act, 1949 (as applicable to co-operative societies). The violations cited were breach of RBI instructions/guidelines on restriction on holding shares in other co-operative societies under Section 19, and non-publication/non-submission of accounts and balance sheet with the auditor’s report under Section 31. After issuing a show-cause notice and reviewing the bank’s reply, RBI concluded the contraventions were substantiated and imposed a penalty of ₹1,00,000.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was found to have violated RBI instructions/guidelines on restriction on holding shares in other co-operative societies under Section 19 of the Act, and also failed to publish/submit its accounts and balance sheet along with the auditor’s report under Section 31 of the Act. RBI issued a show-cause notice, considered the bank’s written reply, and concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and ensure future compliance with RBI instructions on shareholding in other co-operative societies and statutory reporting requirements. The order does not describe an operational restriction, but it signals continued regulatory scrutiny of the bank’s governance and disclosure practices.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
- u/s 19 of the Act, ibid
- u/s 31 of the Act, ibid
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank