Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
19 Dec 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1 lakh on Shri Vaibhav Lakshmi Mahila Nagrik Sahakari Bank Maryadit, Jhabua, Madhya Pradesh, by order dated December 12, 2024. The penalty was for non-compliance with RBI directions on Priority Sector Lending (PSL) targets and classification, specifically the direction to deposit an amount in the MSE Refinance Fund administered by SIDBI against the bank's shortfall in PSL achievement for FY 2022-23. RBI noted that the bank did not deposit the specified amount even after a cautionary letter and failed to comply within the prescribed time; after considering the bank's reply, RBI sustained the charge and imposed the penalty under the Banking Regulation Act, 1949.
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. The bank had been specifically directed to deposit a certain amount in the MSE Refinance Fund administered by SIDBI against its shortfall in PSL achievement for FY 2022-23, but it failed to do so despite a cautionary letter from RBI and subsequent notice to show cause. RBI sustained the charge that the bank did not comply with the direction within the prescribed time.
Operating Impact
The bank must bear the Rs 1 lakh penalty, and the order serves as a regulatory censure for non-compliance with PSL-related directions. The underlying compliance deficiency concerns the bank's obligations to make the required contribution to SIDBI's MSE Refinance Fund; RBI also noted that further action may still be initiated separately.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 12 Dec 2024
- Effective From
- 12 Dec 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank