Recorded RBI impact
Fine: Rs 6.34 L
Monetary penalty · Fresh imposition
Published by RBI
14 Nov 2024
Case Brief
RBI, by order dated November 11, 2024, imposed a penalty of Rs 6.34 lakh on The Jaynagar Mozilpur People’s Co-operative Bank Ltd., West Bengal. The bank had been directed to deposit a specified amount in the MSE Refinance Fund administered by SIDBI due to shortfall in its PSL achievement for FY 2022-23, but it failed to comply even after a cautionary letter and subsequent show-cause process. RBI concluded that the non-compliance was sustained and warranted a monetary penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI found that the bank did not comply with specific directions issued on Priority Sector Lending (PSL) - Targets and Classification and on making contribution to the Micro and Small Enterprises (MSE) Refinance Fund. The bank had been directed to deposit a prescribed amount in the MSE Refinance Fund administered by SIDBI against the shortfall in achievement of PSL target for FY 2022-23, but it failed to do so even after a cautionary letter. RBI therefore imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the penalty, but the release does not impose a new operational restriction. The finding is limited to regulatory non-compliance; RBI notes the penalty is without prejudice to any other action that may be taken later.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 6.34 L
- Order Date
- 11 Nov 2024
- Effective From
- 11 Nov 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank