Recorded RBI impact
Fine: Rs 3.00 L
Monetary penalty · Fresh imposition
Published by RBI
17 Aug 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 3.00 lakh on Ordnance Equipment Factory Prarambhik Sahkari Bank Ltd., Kanpur for non-compliance with specific directions issued under the Supervisory Action Framework (SAF). The statutory inspection for the bank’s position as on March 31, 2022 found that it had offered interest rates on deposits higher than those offered by State Bank of India, contrary to RBI directions. After issuing a show-cause notice and considering the bank’s reply and oral submissions, RBI concluded that the violation was established and warranted penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
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 a statutory inspection found that the bank had offered interest rates on deposits above those offered by State Bank of India, contrary to specific directions issued under the Supervisory Action Framework (SAF). RBI issued a show-cause notice, considered the bank’s written reply and oral submissions, and concluded that the non-compliance was substantiated.
Operating Impact
The bank must absorb the monetary penalty and remain compliant with RBI’s SAF directions going forward. The release does not mention any operational restriction, but it signals continued regulatory scrutiny over its deposit pricing and compliance controls.
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 3.00 L
- Order Date
- 8 Aug 2023
- Effective From
- 8 Aug 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank