Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
16 Aug 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Shri Dadasaheb Gajmal Co-operative Bank Ltd., Pachora, Dist: Jalgaon under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its instructions/guidelines by creating a floating charge on its assets without prior permission from the central bank. After issuing a show-cause notice and considering the bank's written and oral submissions, RBI concluded that the violation was substantiated and that penalty was warranted.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after finding that the bank created a floating charge on its assets without obtaining prior permission from RBI, contrary to RBI instructions/guidelines. The bank had received a show-cause notice and made written and oral submissions, but RBI concluded the violation was substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and ensure future compliance with RBI requirements on creation of floating charges over assets. The action does not describe any operational restriction, but it signals heightened regulatory scrutiny over similar governance/authorization lapses.
Regulatory Basis
- Section 47A(1)(b) 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