Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
7 Aug 2023
Case Brief
By an order dated August 02, 2023, RBI imposed a monetary penalty of Rs 1.50 lakh on Shri Vinayak Sahakari Bank Ltd., Ahmedabad (Gujarat). The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for contravention of RBI directions on placement of deposits with other banks by primary (urban) co-operative banks. RBI's inspection, with reference to the bank's financial position as on March 31, 2022, found that the bank had breached prudential inter-bank (counterparty) exposure limits. After show-cause proceedings, RBI concluded the non-compliance was substantiated and warranted penalty.
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 its inspection and subsequent examination found that Shri Vinayak Sahakari Bank Ltd. had violated RBI directions on placement of deposits with other banks by primary (urban) co-operative banks. The specific deficiency noted was breach of prudential inter-bank (counterparty) exposure limit. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the charge of non-compliance was substantiated.
Operating Impact
The bank must absorb the penalty; the release does not describe any operational restriction or continuing prohibition. The finding may affect supervisory scrutiny and compliance expectations, but no direct depositor or customer action is stated beyond the monetary penalty.
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 1.50 L
- Order Date
- 2 Aug 2023
- Effective From
- 2 Aug 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank