Recorded RBI impact
Fine: Rs 1.20 L
Monetary penalty · Fresh imposition
Published by RBI
20 Mar 2025
Case Brief
By an order dated March 18, 2025, RBI imposed a monetary penalty of Rs 1.20 lakh on Sreenivasa Padmavathi Co-operative Urban Bank Ltd., Telangana. The action was taken for non-compliance with RBI directions on Priority Sector Lending (PSL) targets and classification, specifically the bank's failure to deposit the prescribed amount in the MSE Refinance Fund maintained with SIDBI against the shortfall in achievement of the PSL target for FY 2022-23. RBI issued a show-cause notice, considered the bank's written reply and oral submissions, and concluded that the charge 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.
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 because the bank did not comply with RBI directions on Priority Sector Lending (PSL) targets and classification. Specifically, RBI had directed the bank to deposit a certain amount in the MSE Refinance Fund administered by SIDBI against the PSL shortfall for FY 2022-23, but the bank failed to make the deposit. RBI also issued a show-cause notice, considered the bank's reply and oral submissions, and sustained the charge before imposing the penalty.
Operating Impact
The bank must absorb the monetary penalty and remain mindful of continued RBI oversight. The release does not impose any new operational restriction, but it signals that RBI may initiate other action separately 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 1.20 L
- Order Date
- 18 Mar 2025
- Effective From
- 18 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank