Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
11 Apr 2022
Case Brief
By an order dated April 06, 2022, RBI imposed a monetary penalty of ₹1.00 lakh on Mahesh Urban Co-operative Bank Ltd., Ahmedpur, Maharashtra under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949. The bank was found to have failed to comply with RBI’s Directions to Urban Co-operative Banks on Exposure Norms & Statutory/Other Restrictions-UCBs, specifically by not adhering to the prudential inter-bank (gross) exposure limit. RBI issued a show-cause notice, considered the bank’s replies and oral submissions, and concluded that the violation was substantiated.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after finding that Mahesh Urban Co-operative Bank Ltd., Ahmedpur, Maharashtra had contravened / failed to comply with RBI’s Directions to Urban Co-operative Banks on Exposure Norms & Statutory/Other Restrictions-UCBs. The inspection report for the bank’s financial position as on March 31, 2019 found non-adherence to the prudential inter-bank (gross) exposure limit. After a show-cause notice, replies, and oral submissions, RBI concluded the charge was substantiated and imposed the penalty.
Operating Impact
The bank must bear the financial penalty, while the finding may also affect its compliance record and regulatory scrutiny. The release states the penalty is based on regulatory deficiencies and does not pronounce on the validity of any customer transaction or agreement.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 6 Apr 2022
- Effective From
- 6 Apr 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank