Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
31 May 2019
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹2,00,000 on Ordnance Equipment Factory Prarambhik Sahkari Bank Ltd., Kanpur, 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 said the bank violated instructions/guidelines relating to prudential norms on inter-bank gross and counterparty exposure limits and membership of credit information companies. After issuance of a show-cause notice and no written reply from the bank, RBI concluded the violations were substantiated and imposed the penalty.
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 the bank had violated RBI instructions/guidelines relating to prudential norms on inter-bank gross and counterparty exposure limits and membership of credit information companies. The bank did not submit a written reply to the show-cause notice, and RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not indicate a licence action or operating restriction. The enforcement action serves as a compliance warning regarding exposure limits and credit information company membership requirements.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank