Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
14 Nov 2022
Case Brief
RBI imposed, by order dated November 11, 2022, a monetary penalty of Rs 1 lakh on Jila Sahakari Kendriya Bank Maryadit, Balaghat (M.P) for contravention of the Banking Regulation Act, 1949 and NABARD directions on 'Frauds - Guidelines for Classification, Reporting and Monitoring'. The inspection report found that the bank delayed submission of OSS returns to NABARD and delayed reporting of frauds. RBI concluded that the non-compliance was substantiated and warranted penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act.
Why RBI Acted
Based on an inspection report as of March 31, 2020, RBI found that the bank had delayed submission of OSS returns to NABARD and had reported frauds to NABARD with delay. RBI held these actions to be contraventions / non-compliance with the Banking Regulation Act, 1949 and NABARD's directions on 'Frauds - Guidelines for Classification, Reporting and Monitoring', 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 bear the monetary penalty, and the order serves as a compliance signal for its regulatory reporting obligations. There is no indication of an operational restriction, but the bank is expected to strengthen timeliness in submitting OSS returns and fraud reports to NABARD going forward.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
- Banking Regulation Act, 1949
- directions issued by NABARD on ‘Frauds - Guidelines for Classification, Reporting and Monitoring’
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 11 Nov 2022
- Effective From
- 11 Nov 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank