Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
11 Jul 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on The Dahod Urban Co-operative Bank Limited, Dahod. The penalty was levied under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) for violations of RBI directives and guidelines relating to share linking norms, single and group borrower exposure limits, donation beyond the permissible limit, and KYC policy formulation and compliance with KYC and Anti Money Laundering guidelines. RBI considered the bank's reply to the show-cause notice and personal submissions, but concluded that the violations were substantiated.
Why RBI Acted
The Reserve Bank of India imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after finding that the bank violated RBI directives/guidelines relating to share linking norms, single and group borrower exposure limits, grant of donation beyond the permissible limit, formulation of KYC policy, and adherence to KYC and Anti Money Laundering guidelines. The bank had replied to a show-cause notice and made personal submissions, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not mention any operational restriction or suspension. The action signals regulatory non-compliance in lending, donations, and KYC/AML controls, but it does not impose a forward-looking business curtailment beyond the fine itself.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank