Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
2 Mar 2009
Case Brief
The Reserve Bank of India penalised Shahada Peoples Co-operative Bank Ltd., Shahada, District Nandurbar with a monetary penalty of Rs. 1.00 lakh under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was found to have violated RBI directives/guidelines by exceeding the individual exposure ceiling through investment in IDFC Bonds. After a show-cause notice and review of the bank's written reply, RBI concluded that the contravention was substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), after concluding that Shahada Peoples Co-operative Bank Ltd. had violated RBI directives/guidelines by exceeding the individual exposure ceiling through investment in IDFC Bonds. RBI issued a show-cause notice, considered the bank's written reply, and found the violation substantiated.
Operating Impact
The bank must absorb the monetary penalty; the release does not describe any operational restriction or licence-related action. The immediate forward-looking impact is financial and reputational, with no stated change to customer-facing operations or obligations beyond the penalty itself.
Regulatory Basis
- Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank