Recorded RBI impact
Fine: Rs 25,000
Monetary penalty · Fresh imposition
Published by RBI
15 Jul 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹25,000 on Sivagangai District Central Co-operative Bank Limited, Sivagangai, Tamil Nadu, by an order dated July 03, 2024. The penalty arose from non-compliance with NABARD’s directions on ‘Frauds- Guidelines for Classification, Reporting and Monitoring’, specifically a delay in reporting a fraud to NABARD. RBI issued a show-cause notice, considered the bank’s response and oral submissions, and then concluded that the charge was sustained. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory review found that the bank had not complied with NABARD’s directions on ‘Frauds- Guidelines for Classification, Reporting and Monitoring’. The bank was issued a show-cause notice, and after considering its reply and oral submissions, RBI concluded that the charge of delay in reporting fraud to NABARD was sustained. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and remain subject to RBI/NABARD supervisory scrutiny. The release also makes clear that the fine is without prejudice to any other action RBI may initiate, so additional regulatory steps remain possible if warranted.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 25,000
- Order Date
- 3 Jul 2024
- Effective From
- 3 Jul 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank