Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
29 May 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1 lakh on Kohinoor Sahakari Bank Ltd., Ichalkaranji, Maharashtra, by order dated May 23, 2023. RBI said the bank had failed to comply with directions on investments by Primary (Urban) Co-operative Banks, specifically by breaching the prudential inter-bank gross exposure limit and the inter-bank counterparty limit. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection and consideration of the bank’s reply to a show-cause notice.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after its statutory inspection and review of related reports/correspondence found that the bank had not complied with RBI directions on investments by Primary (Urban) Co-operative Banks. The specific non-compliances cited were breach of the prudential inter-bank gross exposure limit and the inter-bank counter party limit. RBI stated the action was based on regulatory compliance deficiencies and not intended to pronounce on the validity of any customer transaction or agreement.
Operating Impact
The bank must absorb the monetary penalty; no separate operational restriction was imposed in this release. The action signals regulatory non-compliance concerns, but it does not by itself limit customer operations or invalidate transactions.
Regulatory Basis
- section 47 A (1) (c) read with sections 46 (4) (i) and 56 of Banking Regulation Act, 1949 (BR Act)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 23 May 2023
- Effective From
- 23 May 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank