Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
23 Jun 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Ajara Urban Co-operative Bank Ltd., Ajara, Kolhapur, by order dated June 23, 2021. RBI said the bank had contravened its direction on ‘Maintenance of Deposit Accounts’ because the annual review of inoperative accounts had not been done, as revealed in inspection findings for the bank’s financial position as on March 31, 2019. RBI issued a notice, considered the bank’s reply and oral submissions, and then concluded that the charge was substantiated and that monetary penalty was warranted under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, because the bank contravened the RBI direction on ‘Maintenance of Deposit Accounts’. The inspection report for the bank’s financial position as on March 31, 2019 found that the annual review of inoperative accounts had not been done. After a show-cause notice, written reply, and oral submissions, RBI concluded the charge was substantiated and penalty was warranted.
Operating Impact
The bank must absorb the penalty and ensure compliance with RBI’s deposit-account maintenance requirements going forward, especially the periodic review of inoperative accounts. The action does not indicate a broader operational restriction, but it highlights ongoing compliance obligations for the bank’s deposit-account operations and customer account handling.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 23 Jun 2021
- Effective From
- 23 Jun 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank