Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
28 Mar 2011
Case Brief
The Reserve Bank of India imposed a penalty of Rs 1 lakh on Nagrik Sahakari Bank Limited, Babra, Dist. Amreli, Gujarat, under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated its instructions on reporting cash transactions above Rs 10 lakh to FIU-IND and on granting unsecured advances beyond the prescribed limits. The bank had received a show-cause notice, submitted a written reply, and made personal submissions, but RBI concluded that the violations were substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). The bank was found to have violated RBI instructions regarding reporting of cash transactions above Rs 10 lakh to FIU-IND, New Delhi, and granting unsecured advances in excess of prescribed limits. After considering the bank's written reply and personal submissions, RBI concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and any compliance implications arising from the cited breaches. The action does not describe a business restriction, but it signals heightened regulatory scrutiny over transaction reporting and unsecured lending practices.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank