Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
19 Dec 2022
Case Brief
The RBI imposed a monetary penalty of ₹1.00 lakh on The Lakhwad Nagarik Sahakari Bank Ltd., Lakhwad, district Mehsana (Gujarat). The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, because a statutory inspection revealed that the bank had not maintained the minimum Cash Reserve Ratio (CRR), contrary to RBI directions on maintenance of statutory reserves for Primary (Urban) Co-operative Banks. After issuing a show-cause notice and considering the bank's written and oral submissions, RBI found the contravention substantiated and levied the penalty. The release states that the action is based on deficiencies in regulatory compliance and does not pronounce on customer transactions.
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 after a statutory inspection found that the bank had not maintained the minimum Cash Reserve Ratio (CRR), thereby contravening RBI directions on Maintenance of Statutory Reserves – CRR and SLR by Primary (Urban) Co-operative Banks. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the charge was substantiated.
Operating Impact
The bank must absorb the monetary penalty and ensure compliance with RBI's CRR/SLR reserve-maintenance requirements going forward. The action does not itself restrict operations or directly affect customers' existing transactions, but it signals heightened regulatory scrutiny of the bank's reserve compliance.
Regulatory Basis
- Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 12 Dec 2022
- Effective From
- 12 Dec 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank