Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
31 May 2013
Case Brief
The Reserve Bank of India penalized Jain Cooperative Bank Ltd, 80 Darya Ganj, New Delhi-110002 with a monetary penalty of Rs 2 lakh 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 had violated inter-bank exposure limits, exposure norms relating to the real estate sector, KYC guidelines, the Do's and Don'ts prescribed for the Board of Directors, and norms on loans to directors and their relatives. The bank also failed to submit compliance on previous RBI reports. The penalty was imposed after issuance of a show-cause notice and examination of the bank's written reply.
Why RBI Acted
The Reserve Bank of India 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). The bank was found to have violated inter-bank exposure limits, exceeded/ignored exposure norms for the real estate sector, failed to adhere to KYC guidelines, did not follow the Do's and Don'ts prescribed for the Board of Directors, extended loans to directors and their relatives, and did not submit compliance to previous RBI reports. RBI issued a show-cause notice and considered the bank's written reply before imposing the penalty.
Operating Impact
The bank must absorb the penalty and address the compliance weaknesses identified by RBI. The findings point to continuing expectations around exposure limits, KYC, board governance, related-party lending, and timely regulatory reporting, which remain relevant for the bank's operations and supervision.
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