Recorded RBI impact
Fine: Rs 25,000
Monetary penalty · Fresh imposition
Published by RBI
14 Feb 2022
Case Brief
By an order dated February 11, 2022, RBI imposed a monetary penalty on Mula Sahakari Bank Ltd., Sonai, Ahmednagar for contravention of, and non-adherence with, RBI Directions issued to Urban Co-operative Banks on Exposure Norms & Statutory/Other Restrictions-UCBs. The inspection report, based on the bank's financial position as on March 31, 2020, found that the bank had not adhered to the prudential inter-bank counterparty limit prescribed under those directions. After issuing a show-cause notice and considering the bank's replies and oral submissions, RBI concluded that the non-compliance was substantiated and warranted the penalty.
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 an inspection found that Mula Sahakari Bank Ltd. had not complied with the prudential inter-bank counterparty limit prescribed under RBI Directions on Exposure Norms & Statutory/Other Restrictions-UCBs. RBI said the charge of non-compliance was substantiated after considering the bank's replies and oral submissions.
Operating Impact
The bank must absorb the penalty and continue complying with RBI exposure norms and statutory restrictions applicable to urban co-operative banks. The order does not state any operational prohibition, but it reinforces ongoing compliance obligations for the bank and its counterparties.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 25,000
- Order Date
- 11 Feb 2022
- Effective From
- 11 Feb 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank