Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
3 May 2013
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on The Financial Cooperative Bank Ltd., Surat (Gujarat) under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The action was taken because the bank violated RBI instructions by exceeding the prescribed ceiling for inter-bank deposit exposure limit. RBI issued a show cause notice, examined the bank's written reply and personal submissions, and concluded that the violation was substantiated.
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 Financial Cooperative Bank Ltd., Surat (Gujarat) violated RBI instructions by exceeding the ceiling prescribed for inter-bank deposit exposure limit. RBI had issued a show cause notice, considered the bank's written reply and personal submissions, and concluded that the contravention was substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and ensure future compliance with RBI's inter-bank exposure limits. No operational restriction was announced, but the finding signals heightened compliance expectations for similar treasury and exposure-limit breaches.
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