Recorded RBI impact
Fine: Rs 1.60 L
Monetary penalty · Fresh imposition
Published by RBI
23 Dec 2024
Case Brief
RBI imposed a monetary penalty of ₹1.60 lakh on Shree Laxmi Mahila Sahakari Bank Limited, Mehsana, Gujarat, by order dated December 13, 2024. The penalty was based on supervisory findings from the bank’s statutory inspection (with reference to its financial position as on March 31, 2023) and subsequent proceedings. RBI held that the bank had failed to comply with directions on placement of deposits with other banks by primary urban co-operative banks, KYC requirements, and membership/reporting obligations relating to Credit Information Companies. The cited lapses included failure to observe the prudential inter-bank counterparty exposure limit, deficiencies in customer due diligence, delayed upload of KYC records to CKYCR, and failure to submit borrower credit information to CICs. RBI stated that the penalty was imposed under the Banking Regulation Act, 1949 and the Credit Information Companies (Regulation) Act, 2005, and that the action was without prejudice to any other action that may be initiated.
Why RBI Acted
Following a statutory inspection with reference to its financial position as on March 31, 2023, RBI issued a show-cause notice and, after considering the bank’s reply and oral submissions, found that charges were sustained. The bank failed to adhere to the prudential inter-bank counterparty exposure limit, carry out customer due diligence in certain accounts, upload KYC records to CKYCR within the prescribed timeline, and submit credit information of its borrowers to any of the four CICs. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 and Section 25 of the Credit Information Companies (Regulation) Act, 2005.
Operating Impact
The bank must absorb the financial penalty and remain subject to RBI’s supervisory framework. The action does not itself restrict operations, but it signals ongoing compliance expectations around inter-bank exposures, KYC/CKYCR timelines, and CIC reporting for borrowers.
Regulatory Basis
- Section 47A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
- Section 25 of the Credit Information Companies (Regulation) Act, 2005
Action Facts
- Primary Impact
- Fine: Rs 1.60 L
- Order Date
- 13 Dec 2024
- Effective From
- 13 Dec 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank