Recorded RBI impact
Fine: Rs 3.50 L
Monetary penalty · Fresh imposition
Published by RBI
6 Nov 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹3.50 lakh on Malpur Nagarik Sahakari Bank Limited, Malpur, Dist. Aravalli, Gujarat, by order dated October 10, 2023. The penalty was imposed for non-compliance with RBI directions on placement of deposits with other banks by primary urban co-operative banks. RBI’s inspection found that the bank breached the prudential inter-bank gross exposure limit and the prudential inter-bank counterparty exposure limit, and after considering the bank’s reply and oral submissions, concluded that the contravention was substantiated.
Why RBI Acted
RBI imposed a monetary penalty under Section 47-A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The statutory inspection and related records showed that the bank had breached the prudential inter-bank gross exposure limit and the prudential inter-bank counterparty exposure limit, amounting to non-compliance with RBI directions on placement of deposits with other banks by primary urban co-operative banks.
Operating Impact
The bank must absorb the penalty and continue operating in compliance with RBI’s inter-bank exposure norms. The order does not invalidate customer transactions, but it signals regulatory deficiency and may prompt tighter internal controls over deposit placement and exposure management.
Regulatory Basis
- Section 47-A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 3.50 L
- Order Date
- 10 Oct 2023
- Effective From
- 10 Oct 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank