Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
22 Nov 2010
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on Kasundia Co-operative Bank Ltd., Howrah. RBI said the bank had resorted to borrowings without prior approval from the Reserve Bank, violating Section 35A directions under the Banking Regulation Act, 1949 (AACS). After a show-cause notice and the bank's written reply, RBI concluded that the contravention was substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 after finding that Kasundia Co-operative Bank Ltd., Howrah had violated Section 35A directions by resorting to borrowings without prior prior approval from RBI. The bank received a show-cause notice, submitted a written reply, and RBI concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must bear the monetary penalty, but the release does not indicate any additional operational restriction or suspension. The finding records a compliance breach relating to borrowing without RBI approval and may affect the bank's regulatory record.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949
- Section 35A of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank