Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
30 Oct 2023
Case Brief
By an order dated October 05, 2023, RBI imposed a monetary penalty of ₹2.00 lakh on Mizoram Co-operative Apex Bank Ltd., Aizawl. The penalty was imposed because the bank did not comply with RBI’s directions on Housing Finance applicable to State Co-operative Banks; the inspection findings showed that its total exposure to housing finance was above the prescribed limit. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the contravention was substantiated under Section 47-A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty of ₹2.00 lakh on Mizoram Co-operative Apex Bank Ltd., Aizawl under Section 47-A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The breach related to non-compliance with RBI directions on Housing Finance applicable to State Co-operative Banks, specifically that the bank’s total exposure to housing finance exceeded the prescribed limit. RBI stated the action was based on deficiencies in regulatory compliance and not intended to pronounce on the validity of any transaction or agreement.
Operating Impact
The bank must absorb the monetary penalty and address the compliance gap that led to the breach. Going forward, it must ensure its housing finance exposure remains within RBI-prescribed limits, with regulatory scrutiny focused on compliance with the applicable directions.
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 2.00 L
- Order Date
- 5 Oct 2023
- Effective From
- 5 Oct 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank