Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Jun 2012
Case Brief
The Reserve Bank of India penalised The Bundi Urban Co-operative Bank Limited, Bundi, Rajasthan with Rs 2 lakh under the Banking Regulation Act, 1949 and the Payment and Settlement Systems Act, 2007. RBI said the bank repeatedly violated its directives relating to donation and the levy of service charges on customers. After issuing a show-cause notice and considering the bank's written reply and personal submissions, RBI concluded that the violations were substantiated and merited the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), and Section 30(1) read with Section 26(6) of the Payment and Settlement Systems Act, 2007. The bank was found to have repeatedly violated RBI directives concerning donations and the levy of service charges on customers; the RBI considered the bank's reply and personal submissions but concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and address compliance gaps in how it applies RBI directives on donations and customer service charges. The order does not state any operational restriction, but it signals heightened supervisory scrutiny over customer-facing charges and related practices.
Regulatory Basis
- Section 47(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949
- Section 30(1), read with Section 26(6), of the Payment and Settlement Systems Act, 2007
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank