Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
4 Dec 2023
Case Brief
By an order dated November 20, 2023, RBI imposed a monetary penalty of Rs 1.00 lakh on The Chembur Nagarik Sahakari Bank Ltd., Mumbai. The action was taken for non-compliance with RBI directions on 'Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks' after inspection found that the bank charged fixed penal charges for minimum-balance shortfalls instead of charges proportionate to the shortfall, and did not inform customers that penal charges would apply if the minimum balance was not restored within one month of notice. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
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 inspection found that the bank had not complied with RBI directions on 'Maintenance of Deposit Accounts - Primary (Urban) Co-operative Banks'. Specifically, it charged fixed penal charges for shortfall in minimum balance in savings accounts instead of charges proportionate to the shortfall, and it failed to notify customers that penal charges would apply if the minimum balance was not restored within a month from the date of notice.
Operating Impact
The bank must bear the monetary penalty, but the release does not impose any additional operating restriction. The finding underscores the need to correct deposit-account charge practices and customer notices going forward, with implications for savings account holders affected by minimum-balance penal charges.
Regulatory Basis
- section 47A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 20 Nov 2023
- Effective From
- 20 Nov 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank