Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
17 Mar 2021
Case Brief
RBI imposed a monetary penalty of ₹1.00 lakh on Indore Paraspar Sahakari Bank Limited, Indore, by order dated March 16, 2021. The penalty was levied because the bank contravened RBI's directions on 'Exposure Norms and Statutory/Other Restrictions-UCBs'. RBI said the violation was established from the inspection report based on the bank's financial position as on March 31, 2019, and after issuing a show-cause notice and considering the bank's written and oral responses. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Why RBI Acted
Based on the inspection report of the bank as on March 31, 2019, RBI found contravention of / non-compliance with its directions on 'Exposure Norms and Statutory/Other Restrictions-UCBs'. A show-cause notice was issued, and after considering the bank's replies and oral submissions, RBI concluded that the charge of non-compliance was substantiated and imposed a penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the penalty, but the release does not describe any new business restriction or suspension. The forward-looking impact is limited to the compliance and financial consequence of the fine, while RBI's underlying expectation is that the bank adhere to exposure norms and related UCB restrictions going forward.
Regulatory Basis
- 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 1.00 L
- Order Date
- 16 Mar 2021
- Effective From
- 16 Mar 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank