Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
25 Jul 2019
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Shri Bhausaheb Thorat Amrutvahini Sahakari Bank Ltd., Ghulewadi, Ahmednager under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated directives/instructions/guidelines issued on declaration of dividend by UCBs. After issuing a show-cause notice and considering the bank's written reply, RBI concluded that the violation was substantiated and warranted penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), after concluding that the bank had violated RBI directives/instructions/guidelines relating to declaration of dividend by urban co-operative banks. The bank had received a show cause notice and submitted a written reply, but RBI held the violation to be substantiated and deserving of penalty.
Operating Impact
The bank must absorb the monetary penalty and address compliance gaps in dividend-related regulatory instructions. No operational restriction is described, but the action signals supervisory scrutiny over adherence to RBI guidelines applicable to UCBs.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank