Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Sept 2023
Case Brief
RBI imposed a monetary penalty of ₹1 lakh on Shree Warana Sahakari Bank Ltd., Kolhapur, Maharashtra, by order dated August 22, 2023. The penalty was levied for non-compliance with RBI directions on maintenance of deposit accounts for primary urban co-operative banks, after inspection found that the bank was charging a fixed penalty for shortfall in minimum balance in savings bank accounts rather than a penalty proportionate to the extent of shortfall.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after statutory inspection and review of the bank's records showed non-compliance with RBI's directions on 'Maintenance of Deposit Accounts- Primary (Urban) co-operative Banks'. The bank was found to have collected a fixed penalty for shortfall in maintenance of minimum balance in savings bank accounts, rather than a penalty proportionate to the extent of shortfall.
Operating Impact
The bank must absorb the penalty and ensure its deposit-account penalty practices comply with RBI directions going forward. The action does not state any restriction on operations, but it signals continued regulatory scrutiny over how the bank charges customers for minimum-balance shortfalls.
Regulatory Basis
- Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 22 Aug 2023
- Effective From
- 22 Aug 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank