Recorded RBI impact
Fine: Rs 3.00 L
Monetary penalty · Fresh imposition
Published by RBI
19 Dec 2022
Case Brief
RBI, by order dated December 16, 2022, imposed a monetary penalty of Rs 3 lakh on The Janata Co-operative Bank Ltd., Godhra, Dist. Panchmahal (Gujarat). The penalty was imposed under the Banking Regulation Act for contravention of RBI directions on maintenance of statutory reserves (CRR and SLR) by primary (urban) co-operative banks. RBI's inspection found that the bank had not maintained the minimum Cash Reserve Ratio, and after issuing a show-cause notice, considering the bank's reply and oral submissions, RBI held the charge substantiated and levied the penalty. RBI clarified that the action was based on regulatory compliance deficiencies and not intended to pronounce on the validity of any transaction or agreement with customers.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The action followed a statutory inspection (with reference to the bank's financial position as on March 31, 2018 and March 31, 2019) and review of inspection reports/correspondence, which revealed that the bank had failed to maintain the minimum Cash Reserve Ratio (CRR), thereby contravening RBI directions on maintenance of statutory reserves by primary (urban) co-operative banks. After a show-cause notice, reply, and oral hearing, RBI concluded the charge was substantiated and imposed the penalty.
Operating Impact
The bank must bear the monetary penalty; the order does not itself impose a new operating restriction. The finding reflects a compliance breach relating to statutory reserve maintenance, which may be relevant for future supervisory scrutiny.
Regulatory Basis
- Section 47 A (1) (c)
- Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 3.00 L
- Order Date
- 16 Dec 2022
- Effective From
- 16 Dec 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank