Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 May 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on The Godhra Urban Co-operative Bank Ltd., Godhra, Dist. Panchmahal (Gujarat), after finding that the bank had issued a large number of ‘at par’ cheques to a single party on the same day in cash for values just below ₹50,000, in circumvention of RBI guidelines. The penalty was imposed under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), after the bank’s show-cause reply and personal submission were considered and the violation was found 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 bank violated RBI guidelines by issuing a large number of ‘at par’ cheques to a single party on the same day in cash for amounts just below ₹50,000.
Operating Impact
The bank must absorb the financial penalty and the adverse finding on compliance. The order does not describe any operational restriction, but it signals supervisory censure for the cited cheque-issuance practice.
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