Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
10 Mar 2014
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on Imperial Urban Co-operative Bank Ltd., Faizabad, Uttar Pradesh under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was found to have made incorrect reporting in Form I relating to CRR/SLR and incorrect computation of DTL, violated KYC guidelines by not preparing risk profiles for all customers and not fixing threshold limits, and breached prudential inter-bank (gross) exposure limit and prudential inter-bank counterparty limit. RBI issued a show-cause notice, considered the bank’s reply, and concluded that 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 (as applicable to co-operative societies) after finding the bank had incorrectly reported information in Form I relating to CRR/SLR and incorrectly computed DTL. RBI also found violation of KYC guidelines, including non-preparation of risk profiles for all customers and failure to fix threshold limits, as well as breach of prudential inter-bank (gross) exposure limit and prudential inter-bank counterparty limit.
Operating Impact
The bank must absorb the monetary penalty and continue operations, but the RBI action signals compliance deficiencies in reporting, KYC, and exposure management. There is no stated restriction on business activity, but the bank remains accountable for correcting the underlying lapses to avoid further regulatory action.
Regulatory Basis
- Section 47 A (1) (b) read with Section 46 (4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank