Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
11 May 2021
Case Brief
RBI imposed a monetary penalty of ₹1.00 lakh on Shankar Nagari Sahakari Bank Limited, Nanded, Maharashtra, after finding that the bank had contravened RBI directions applicable to urban co-operative banks on Exposure Norms and Statutory/Other Restrictions. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, following a show-cause notice, the bank's written reply, and oral submissions at personal hearing. RBI stated the penalty was based on regulatory compliance deficiencies and did not pronounce on the validity of any customer transaction or agreement.
Why RBI Acted
Based on the inspection report of the bank (financial position as on March 31, 2019), RBI found contravention/non-compliance with directions issued to Urban Co-operative Banks on Exposure Norms and Statutory/Other Restrictions. After issuing a show-cause notice and considering the bank's replies and oral submissions, RBI concluded the charge was substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and ensure future compliance with RBI exposure norms and statutory/other restrictions applicable to urban co-operative banks. There is no stated operational restriction in this release, but the enforcement action signals closer compliance expectations going forward.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 10 May 2021
- Effective From
- 10 May 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank