Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
16 Aug 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty on Indapur Urban Co-operative Bank Ltd., Indapur, Dist: Pune under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its instructions/guidelines relating to credit exposure norms on loans and advances and Know Your Customer (KYC)/Anti-money Laundering (AML) guidelines. After considering the bank’s written reply and oral submissions to the show-cause notice, RBI held that the violations were substantiated and imposed a penalty of Rs 2 lakh.
Why RBI Acted
The Reserve Bank of India imposed a 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 that the bank had violated RBI instructions/guidelines on credit exposure norms for loans and advances and on Know Your Customer (KYC)/Anti-money Laundering (AML) requirements. The bank responded to a show-cause notice with written and oral submissions, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and address the compliance deficiencies identified by RBI, particularly around lending exposure limits and KYC/AML processes. No broader operational restriction is stated in this release, but the findings may heighten supervisory scrutiny.
Regulatory Basis
- Section 47A(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 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank