Recorded RBI impact
Fine: Rs 1.10 L
Monetary penalty · Fresh imposition
Published by RBI
17 Feb 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.10 lakh on Shree Balaji Urban Co-operative Bank Ltd., Satna, Madhya Pradesh, by order dated February 13, 2025. The penalty was levied for non-compliance with RBI directions on Priority Sector Lending (PSL) targets/classification and specific instructions to contribute to the MSE Refinance Fund administered by SIDBI against the bank’s shortfall in PSL achievement for FY 2022-23. RBI noted that the bank failed to deposit the prescribed amount even after a cautionary letter and, following a show-cause notice, reply, oral submissions, and additional submissions, concluded that the charge was sustained under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty because the bank did not comply with certain RBI directions on Priority Sector Lending (PSL) - Targets and Classification and specific directions to deposit an amount in the MSE Refinance Fund administered by SIDBI to cover the shortfall in achievement of PSL target for FY 2022-23. Even after a cautionary letter, the bank failed to deposit the prescribed amount within the stipulated time; after notice and hearing, RBI sustained the charge and imposed 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 monetary penalty, but the release does not announce any new operational restriction or licence action. The action serves as a regulatory censure for non-compliance with PSL-related obligations and the MSE Refinance Fund deposit requirement; RBI also notes that further action may still be initiated separately.
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 1.10 L
- Order Date
- 13 Feb 2025
- Effective From
- 13 Feb 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank