Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
22 Feb 2024
Case Brief
By an order dated February 13, 2024, RBI imposed a monetary penalty of Rs 1.50 lakh on The Adinath Co-operative Bank Limited, Dist. Surat, Gujarat. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, for non-compliance with RBI directions on placement of deposits with other banks by Primary (Urban) Co-operative Banks. RBI’s inspection for the bank’s financial position as on March 31, 2023 found that it had breached the prescribed inter-bank gross exposure limit as well as the prudential inter-bank counterparty exposure limit. After notice, reply, and oral hearing, RBI held the charge substantiated and levied the penalty.
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 its inspection found that the bank had not complied with RBI’s directions on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. The inspection revealed breaches of both the prescribed inter-bank gross exposure limit and the prudential inter-bank counterparty exposure limit. RBI concluded that the charge of non-compliance was substantiated after considering the bank’s reply and oral submissions.
Operating Impact
The bank must absorb the monetary penalty; the release does not impose any new operating restriction or closure. The enforcement action is backward-looking, but it signals continued regulatory scrutiny over the bank’s inter-bank exposure practices and compliance with RBI directions.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.50 L
- Order Date
- 13 Feb 2024
- Effective From
- 13 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank