Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
20 Jul 2021
Case Brief
RBI, by an order dated July 20, 2021, imposed a monetary penalty of ₹1.00 lakh on Melur Co-operative Urban Bank Ltd., Melur, Madurai District, Tamil Nadu, for contravention of and non-compliance with certain provisions of RBI directions contained in the Master Circular on Board of Directors – UCBs dated July 1, 2015. The bank’s statutory returns for the period ended March 2020 revealed the non-compliance. After issuing a notice and considering the bank’s written reply and oral submissions, RBI held the charges to be substantiated and imposed the penalty under the Banking Regulation Act, 1949 (AACS).
Why RBI Acted
RBI imposed a monetary penalty after the bank failed to adhere to certain directions issued in the Master Circular on Board of Directors – UCBs dated July 1, 2015. Statutory returns for the period ended March 2020 revealed the non-compliance, a show-cause notice was issued, and after considering the bank’s written and oral submissions, RBI concluded that the charges were substantiated and warranted penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Operating Impact
The bank must absorb the monetary penalty and remain compliant with RBI’s Board of Directors-related directions for UCBs. The order does not state any operational restriction, but it underscores continued compliance obligations and regulatory scrutiny.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 20 Jul 2021
- Effective From
- 20 Jul 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank