Recorded RBI impact
Fine: Rs 25,000
Monetary penalty · Fresh imposition
Published by RBI
24 Jun 2024
Case Brief
By an order dated June 21, 2024, RBI imposed a monetary penalty of ₹25,000 on The Hirasugar Employees’ Co-operative Bank Limited, Belagavi, Karnataka. The action was taken after a statutory inspection and subsequent supervisory process found non-compliance with RBI’s directions on ‘Exposure Norms and Statutory/Other Restrictions − UCBs’. RBI said the bank failed to adhere to prudential inter-bank (gross) and counterparty exposure limits, and the charge was sustained after the bank’s reply and oral hearing. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty on The Hirasugar Employees’ Co-operative Bank Limited, Belagavi, Karnataka under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The penalty followed a statutory inspection with reference to the bank’s financial position as on March 31, 2022, and supervisory findings of non-compliance with RBI directions on Exposure Norms and Statutory/Other Restrictions applicable to UCBs. RBI stated that the charge of non-adherence to prudential inter-bank (gross) and counterparty exposure limits was sustained after considering the bank’s reply and oral submissions.
Operating Impact
The bank must absorb the monetary penalty and may face further regulatory action, as RBI explicitly stated the fine is without prejudice to any other action that may be initiated. There is no stated operational restriction on customers or depositors from this release.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 25,000
- Order Date
- 21 Jun 2024
- Effective From
- 21 Jun 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank