Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
1 Feb 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Nagrik Sahakari Bank Maryadit, Shivpuri (Madhya Pradesh) for non-compliance with RBI directions on Exposure Norms & Statutory/Other Restrictions on UCBs and on KYC. RBI said the statutory inspection with reference to the bank's financial position as on March 31, 2022, revealed that the bank breached the prudential inter-bank (gross) exposure limit and did not conduct periodic six-monthly review of customers' risk categorization. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after RBI considered the bank's response and oral submissions.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and subsequent examination found that the bank had breached the prudential inter-bank (gross) exposure limit and failed to review customers' risk categorization at least once every six months, contrary to RBI directions on Exposure Norms & Statutory/Other Restrictions on UCBs and KYC. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank's reply and oral submissions.
Operating Impact
The bank must absorb the penalty and ensure future compliance with RBI exposure norms and KYC requirements. There is no stated withdrawal of business, but the action signals continued supervisory scrutiny and the need to correct control and monitoring weaknesses.
Regulatory Basis
- section 47A (1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 25 Jan 2024
- Effective From
- 25 Jan 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank