Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Jun 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1 lakh on The Baramati Sahakari Bank Limited, Baramati, Maharashtra, for contravention of RBI directions on Exposure Norms and Statutory/Other Restrictions applicable to urban co-operative banks. RBI said the bank had exceeded the prudential inter-bank (single bank) exposure limit, based on an inspection report for the financial position as on March 31, 2019. After issuing a show-cause notice, considering the bank’s reply and oral submissions, RBI concluded that the violation was substantiated and merited penalty 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 failed to comply with RBI directions on Exposure Norms and Statutory/Other Restrictions – UCBs. The inspection for financial position as on March 31, 2019 found that the bank had exceeded the prudential inter-bank (single bank) exposure limit; after notice, reply, and oral submissions, RBI concluded the non-compliance was substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and ensure future compliance with RBI exposure norms, especially inter-bank single exposure limits. The action does not invalidate customer transactions, but it signals ongoing regulatory scrutiny of the bank’s prudential compliance.
Regulatory Basis
- Section 47A(1)(c)
- Section 46(4)(i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 21 Jun 2021
- Effective From
- 21 Jun 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank