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Hissar Urban Cooperative Bank Ltd., Hisar

Co-operative bankHisar, Haryana

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

Recorded RBI impact

Fine: Rs 3.00 L

Monetary penalty · Fresh imposition

S2

Published by RBI

26 Sept 2022

Case Brief

RBI imposed a monetary penalty of Rs 3.00 lakh on Hissar Urban Cooperative Bank Ltd., Hisar by order dated September 23, 2022. The bank was found to have contravened Section 35A and Section 36(1) read with Section 56 of the Banking Regulation Act, 1949 after an inspection revealed it had not followed RBI directions issued under the Supervisory Action Framework. The specific lapse noted was that the bank offered interest rates on savings deposits that were not in line with RBI’s directions. RBI issued a show-cause notice, considered the bank’s reply, and then concluded that the charges were substantiated, warranting the penalty.

Why RBI Acted

Lending normsReporting & disclosure

An inspection of the bank based on its financial position as on March 31, 2021 found contraventions of Section 35A and Section 36(1) read with Section 56 of the Banking Regulation Act, 1949. RBI stated that the bank failed to adhere to directions issued under the Supervisory Action Framework, specifically by offering interest rates on savings deposits that were not in line with RBI’s directions. After considering the bank’s reply, RBI concluded that the charges were substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act.

Operating Impact

The bank must absorb the monetary penalty; the press release does not impose any ongoing operational restriction or withdrawal of business rights. The action is primarily backward-looking, but it signals regulatory non-compliance in savings deposit pricing and may affect supervisory scrutiny going forward.

Regulatory Basis

  • Section 35A of the Banking Regulation Act, 1949
  • Section 36(1) read with Section 56 of the Banking Regulation Act, 1949
  • Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949

Action Facts

Primary Impact
Fine: Rs 3.00 L
Order Date
23 Sept 2022
Effective From
23 Sept 2022
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank