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Smriti Nagrik Sahakari Bank Maryadit, Mandsaur (MP)

Co-operative bankMandsaur, MP

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 4.20 L

Monetary penalty · Fresh imposition

S2

Published by RBI

2 Jan 2025

Case Brief

By an order dated December 30, 2024, RBI imposed a monetary penalty of Rs 4.20 lakh on Smriti Nagrik Sahakari Bank Maryadit, Mandsaur (MP). The penalty was levied for non-compliance with RBI directions on customer service for urban cooperative banks and on loans and advances to directors, their relatives, and firms/concerns in which they are interested. RBI's supervisory review found that the bank recovered SMS alert charges from customers not on an actual-usage basis and sanctioned a loan to the relative of a director. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank's reply, oral submissions, and additional submissions.

Why RBI Acted

Customer protectionGovernance oversightLending norms

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 a statutory inspection as on March 31, 2023 found non-compliance with directions on 'Customer Service - UCBs' and 'Loans and advances to directors, their relatives, and firms/concerns in which they are interested'. RBI found that the bank recovered SMS alert charges from customers without charging on an actual usage basis, and sanctioned a loan to the relative of the bank's director. The penalty was imposed after considering the bank's reply, oral submissions, and additional submissions.

Operating Impact

The bank must bear the penalty and may face additional regulatory action, as RBI stated the monetary penalty is without prejudice to any other action. There is no stated restriction on banking operations, but the findings highlight compliance obligations around customer charges and lending to insiders.

Regulatory Basis

  • Section 47A(1)(c)
  • Sections 46(4)(i)
  • Section 56 of the Banking Regulation Act, 1949

Action Facts

Primary Impact
Fine: Rs 4.20 L
Order Date
30 Dec 2024
Effective From
30 Dec 2024
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank