Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
6 Dec 2018
Case Brief
The Reserve Bank of India imposed a monetary penalty on Muzaffarnagar Jila Sahkari Bank Ltd., Muzaffarnagar, Uttar Pradesh under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found that the bank had violated instructions/guidelines relating to restriction on holding shares in other co-operative societies under Section 19 of the Act. After considering the bank’s reply to the show-cause notice, RBI concluded that the violations were substantiated and that penalty was warranted.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after finding that Muzaffarnagar Jila Sahkari Bank Ltd. had violated RBI instructions/guidelines restricting holding of shares in other co-operative societies under Section 19 of the Act. The bank had replied to a show-cause notice, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty of ₹50,000; the release does not describe any ongoing business restriction or licence action. The forward-looking impact is limited to the financial and compliance consequence of the penalty, with no stated effect on depositors or counterparties.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)
- Section 19 of the Act
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank