Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
6 Oct 2010
Case Brief
The Reserve Bank of India imposed a penalty of Rs 5 lakh on Solapur Nagari Audyogik Sahakari Bank Niyamit, Solapur, Maharashtra under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949. RBI said the bank violated its instructions on investment in government securities and also breached supervisory action earlier imposed on it by letter dated December 23, 2009. After issuing a show-cause notice and considering the bank's written reply, RBI concluded that the violations were substantiated and imposed the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949. The bank was found to have violated RBI's instructions on investment in government securities and also violated supervisory action imposed by RBI vide its letter dated December 23, 2009. RBI issued a show-cause notice, considered the bank's written reply, and concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and ensure future compliance with RBI instructions on government securities investments and any supervisory directions applicable to it. The action does not by itself impose an operating restriction, but it signals enhanced regulatory scrutiny of the bank's treasury and compliance practices.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 23 Dec 2009
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank