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The Limdi Urban Co-operative Bank Limited

Co-operative bankLimdi, Gujarat

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 50,000

Monetary penalty · Fresh imposition

S1

Published by RBI

4 Jan 2024

Case Brief

By an order dated December 13, 2023, RBI imposed a monetary penalty of Rs 50,000 on The Limdi Urban Co-operative Bank Limited, Limdi, dist. Dahod, Gujarat. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for non-compliance with the Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016. RBI’s inspection found that the bank had not paid interest on matured term deposits from the date of maturity until the date of repayment at the applicable rate. After the show-cause process, RBI held the charge to be substantiated and imposed the penalty. The release also states that the action is based on deficiency in regulatory compliance and does not pronounce upon the validity of any transaction or agreement with customers.

Why RBI Acted

Reporting & disclosureCustomer protection

RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for non-compliance with the Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016. The inspection found that the bank had not paid interest on matured term deposits from the date of maturity until repayment at the applicable rate. After considering the bank’s reply and oral submissions, RBI concluded that the contravention was substantiated and warranted penalty.

Operating Impact

The bank must absorb the monetary penalty; no additional operational restriction is described in this release. The finding relates to treatment of matured term deposit interest, so the compliance expectation going forward is to ensure interest is paid from maturity until repayment at the applicable rate.

Regulatory Basis

  • Section 47A(1)(c)
  • Sections 46(4)(i)
  • Section 56 of the Banking Regulation Act, 1949

Action Facts

Primary Impact
Fine: Rs 50,000
Order Date
13 Dec 2023
Effective From
13 Dec 2023
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank