Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
29 Feb 2024
Case Brief
RBI, by order dated February 22, 2024, imposed a monetary penalty of ₹5.00 lakh on Solapur District Central Co-operative Bank Limited, Solapur, Maharashtra. The penalty was imposed for contravention of section 26A read with section 56 of the Banking Regulation Act, 1949 and RBI directions on the Depositor Education and Awareness Fund, after NABARD’s inspection found that the bank had not transferred the eligible amount to the DEA Fund. RBI said the action was based on regulatory non-compliance and did not pronounce on the validity of any transaction or agreement entered into by the bank with its customers.
Why RBI Acted
Following NABARD’s statutory inspection with reference to the bank’s financial position as on March 31, 2023, RBI examined the inspection report and related correspondence and found that the bank had not transferred the eligible amount to the Depositor Education and Awareness Fund. After issuing a show-cause notice and considering the bank’s reply, RBI concluded that contravention of section 26A read with section 56 of the BR Act and non-compliance with RBI’s directions on the DEA Fund were substantiated, warranting a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must absorb the monetary penalty and address the compliance lapse in transferring amounts to the DEA Fund. The action does not by itself restrict banking operations, but it signals supervisory scrutiny over statutory fund-transfer and depositor-protection compliance.
Regulatory Basis
- section 26A read with section 56 of the Banking Regulation Act, 1949
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 22 Feb 2024
- Effective From
- 22 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank