Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Jun 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty on Ratanchand Shah Sahakari Bank Limited, Mangalwedha, Maharashtra by order dated May 30, 2025. The penalty was levied after RBI found non-compliance with certain KYC directions and specific directions issued under the Supervisory Action Framework (SAF). The cited violations included offering higher interest rates on deposits than State Bank of India in breach of SAF directions, breaching the single borrower exposure limit for fresh loans and advances in some instances, and allocating multiple customer identification codes instead of a UCIC for each customer. RBI stated the action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found the bank had not complied with certain RBI directions on Know Your Customer (KYC) and specific directions under the Supervisory Action Framework (SAF). The sustained charges included offering higher interest rates on deposits than those offered by SBI in breach of SAF directions, exceeding the single borrower exposure limit for fresh loans and advances in certain instances, and allotting multiple customer identification codes instead of a Unique Customer Identification Code (UCIC) for each customer. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must absorb the Rs 2 lakh penalty; the release also notes this is without prejudice to any other action RBI may take. No direct customer restriction is imposed by this order, but the findings reflect supervisory non-compliance and may increase regulatory scrutiny.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 30 May 2025
- Effective From
- 30 May 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank