Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
26 Dec 2024
Case Brief
RBI, by order dated December 18, 2024, imposed a monetary penalty of ₹1.00 lakh on Sri Basaveshwara Pattana Sahakara Bank Niyamit, Sindgi, Karnataka. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following a statutory inspection with reference to the bank’s financial position as on March 31, 2023. RBI found that the bank had not adhered to directions issued under the Supervisory Action Framework (SAF), specifically by increasing exposure to a sector with high NPAs and declaring dividend without prior permission of RBI. RBI stated that the penalty is based on regulatory compliance deficiencies and does not pronounce on the validity of transactions with customers.
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, after a statutory inspection found non-compliance with specific directions issued under the Supervisory Action Framework (SAF). The sustained charge was that the bank increased its exposure to a sector where NPAs were high and declared dividend without obtaining prior permission of RBI.
Operating Impact
The bank must absorb the monetary penalty and remain compliant with RBI’s SAF directions. The order does not itself impose a new operational restriction, but it signals continued supervisory scrutiny and potential for further RBI action if non-compliance persists.
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 1.00 L
- Order Date
- 18 Dec 2024
- Effective From
- 18 Dec 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank