Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
20 Sept 2012
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on The Dahod Mercantile Co-operative Bank Ltd., Dist. Dahod, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank had violated its directives on donation. After issuing a show-cause notice, considering the bank's written reply and personal submissions, RBI concluded that the violation was substantiated and that penalty was warranted.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after concluding that the bank had violated Reserve Bank of India directives on donation. RBI considered the facts of the case, the bank's written reply to the show-cause notice, and personal submissions before determining that the violation was substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and remain compliant with RBI directives going forward, particularly on donations. No broader operational restriction is stated in the release, but the penalty signals regulatory non-compliance that can invite further scrutiny.
Regulatory Basis
- Section 47A (1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank