Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Mar 2022
Case Brief
RBI imposed a monetary penalty of ₹2.00 lakh on The Bank Employees’ Co-operative Bank Limited, Kolkata (West Bengal) for contravention of RBI directions applicable to urban cooperative banks on exposure norms and statutory/other restrictions. The inspection for the bank’s position as of March 31, 2019 found that it had not adhered to prudential inter-bank (gross) exposure limits and counterparty limits. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and then concluded that the charges were substantiated, leading to the penalty under the Banking Regulation Act, 1949.
Why RBI Acted
Based on the inspection report for the bank’s financial position as on March 31, 2019, RBI found that the bank had not adhered to the prudential inter-bank (Gross) exposure limit and had not complied with the prudential inter-bank counterparty limit, in contravention of RBI’s directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’. After a show-cause notice, reply, and oral hearing, RBI concluded that the non-compliance was substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and remain compliant with RBI’s exposure norms going forward. There is no stated suspension or operating restriction in this release, but the bank is expected to correct the noted prudential exposure control weaknesses and maintain adherence to RBI directions.
Regulatory Basis
- Section 47 A (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
- 10 Mar 2022
- Effective From
- 10 Mar 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank