Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
22 Dec 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty on Shree Morbi Nagarik Sahakari Bank Limited, Morbi, Gujarat by order dated November 30, 2023. RBI said the bank failed to comply with directions on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)', and the statutory inspection for the bank's financial position as on March 31, 2022 revealed a breach of the prudential inter-bank counterparty exposure limit. After considering the bank's reply and oral submissions, RBI concluded the non-compliance was substantiated and imposed a penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after its statutory inspection and review of the Inspection Report, Risk Assessment Report and related correspondence found that the bank had not complied with RBI's directions on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)'. The specific lapse cited was breach of the prudential inter-bank counterparty exposure limit. The penalty was imposed 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 and ensure future compliance with RBI's placement-of-deposits and counterparty exposure norms. The order does not state any operational restriction on depositors or customers beyond regulatory compliance obligations.
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 50,000
- Order Date
- 30 Nov 2023
- Effective From
- 30 Nov 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank