Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
6 Mar 2025
Case Brief
RBI, by order dated March 03, 2025, imposed a monetary penalty of Rs 2 lakh on Sri Basaveshwar Sahakar Bank Niyamitha, Gulbarga, Karnataka. The penalty was imposed after RBI's statutory inspection and subsequent proceedings found non-compliance with directions on exposure norms and statutory/other restrictions applicable to UCBs, donations/contributions for public or charitable purposes out of profits of UCBs, and Know Your Customer requirements. RBI recorded that the bank breached prudential inter-bank and inter-bank counterparty exposure limits, made donations above the prescribed regulatory cap, and failed to upload KYC records to CKYCR within the stipulated timeline. The penalty was levied under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
Following a statutory inspection with reference to the bank's financial position as on March 31, 2023, RBI issued a show-cause notice based on supervisory findings of non-compliance. After considering the bank's reply and oral submissions, RBI found that the bank had breached prudential inter-bank (gross) and inter-bank counterparty exposure limits, made donations in excess of the prescribed regulatory limit, and failed to upload customer KYC records onto the Central KYC Records Registry within the prescribed timeline. RBI imposed a monetary penalty 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 continue complying with RBI's exposure, donation, and KYC requirements. The order does not itself restrict operations, but it signals ongoing supervisory scrutiny and leaves open the possibility of further RBI action for the same or related lapses.
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 2.00 L
- Order Date
- 3 Mar 2025
- Effective From
- 3 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank