Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Sept 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on The Deola Merchants Co-operative Bank Ltd., Deola, Dist. Nashik under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found that the bank violated its instructions/guidelines by submitting false compliance regarding closure of NPA accounts and by indulging in ever greening of loans. After issuing a show-cause notice and considering the bank's written and oral submissions, RBI concluded that the violation was substantiated and warranted penalty.
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) because the bank violated RBI instructions/guidelines relating to submission of false compliance on closure of NPA accounts, involving ever greening of loans. The bank received a show-cause notice, filed a written reply, and made oral submissions, but RBI concluded the violation was substantiated and merited penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not mention any restriction on operations or additional compliance deadline. The adverse impact is limited to the financial penalty and the regulatory finding on the cited violations.
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