Recorded RBI impact
Fine: Rs 11.0 L
Monetary penalty · Fresh imposition
Published by RBI
27 Sept 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Jammu & Kashmir State Co-operative Bank Limited, Srinagar by order dated September 23, 2021. The action followed a NABARD statutory inspection that found the bank had opened branches without obtaining prior permission from RBI, violating section 23 read with section 56 of the Banking Regulation Act, 1949. RBI issued a show-cause notice, considered the bank’s reply, and then concluded that the contravention was substantiated and merited penalty under section 47A(1)(c) read with section 46(4)(i) and section 56 of the Act.
Why RBI Acted
RBI imposed a monetary penalty after NABARD’s statutory inspection found that the bank had opened branches without prior permission of the Reserve Bank of India, amounting to contravention of section 23 read with section 56 of the Banking Regulation Act, 1949. After considering the bank’s reply, RBI concluded that the charge was substantiated and warranted penalty under section 47A(1)(c) read with section 46(4)(i) and section 56 of the Act.
Operating Impact
The bank must bear the monetary penalty of Rs 11 lakh, but the release does not indicate any operational restriction or cancellation. The finding relates to past non-compliance and does not itself impose a forward-looking business limitation on customers or counterparties.
Regulatory Basis
- section 23 read with section 56 of the Banking Regulation Act, 1949
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 11.0 L
- Order Date
- 23 Sept 2021
- Effective From
- 23 Sept 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank