Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
23 Nov 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Sarvodaya Nagarik Sahakari Bank Ltd., Himmatnagar, Gujarat for non-compliance with its directions on placement of deposits with other banks by Primary (Urban) Co-operative Banks. Based on statutory inspection and examination of the inspection report and related correspondence, RBI found that the bank had breached the inter-bank counter-party exposure limit. Following a show-cause notice and the bank’s reply and oral submissions, RBI held that the violation was substantiated and imposed the penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty on Sarvodaya Nagarik Sahakari Bank Ltd., Himmatnagar, Gujarat for non-compliance with the RBI directions on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. RBI’s inspection, with reference to the bank’s financial position as on March 31, 2022, found that the bank had breached the inter-bank counter-party exposure limit. After issuing a show-cause notice and considering the bank’s reply and oral submissions, RBI concluded that the charge of non-compliance was substantiated and warranted penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must bear the ₹1 lakh penalty; the release does not describe any further operational restriction or cancellation. The finding is a regulatory compliance issue and signals that the bank is expected to adhere to RBI’s exposure limits for deposits placed with other banks going forward.
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
- 13 Oct 2023
- Effective From
- 13 Oct 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank