Recorded RBI impact
Fine: Rs 20.0 L
Monetary penalty · Fresh imposition
Published by RBI
22 Jun 2015
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Hubli Urban Co-operative Bank Ltd., Hubli, Karnataka under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its instructions through irregularities in cheque discounting and overdrawal in overdraft loan accounts. After issuing a show-cause notice and reviewing the bank’s written reply, RBI concluded that the violations were established beyond doubt and justified 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 instructions, including irregularities in cheque discounting and overdrawal in overdraft loan accounts. RBI had issued a show-cause notice, considered the bank’s written reply, and concluded that the violations were established beyond doubt and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and address the compliance lapses identified by RBI. The action does not indicate suspension or restriction, but it signals heightened regulatory scrutiny over cheque discounting and overdraft lending practices.
Regulatory Basis
- Section 47 A (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 20.0 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank