Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
25 Apr 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on The Dhrangadhra Peoples’ Co-operative Bank Ltd., Dist. Surendranagar (Gujarat) under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found violations of its guidelines and instructions regarding concurrent audit of the investment portfolio, periodic review of risk categorization, generation and submission of Suspicious Transactions Reports to FIU (IND), and the DEAF Scheme. The bank had received a show-cause notice, submitted a written reply, and made personal submissions, but RBI held that the violations were substantiated and imposed the 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). The bank was found to have violated RBI guidelines and instructions on subjecting the investment portfolio to concurrent audit, carrying out periodical review of risk categorization, generating Suspicious Transactions Reports and submitting them to FIU (IND), and compliance with the DEAF Scheme. The bank responded to the 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 describe any operational restriction or licence action. The forward-looking impact is limited to the penalty itself, with the compliance lapses serving as a warning for future adherence to RBI audit, AML/reporting, and DEAF-related requirements.
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