Recorded RBI impact
Fine: Rs 37.5 L
Monetary penalty · Fresh imposition
Published by RBI
11 Jul 2022
Case Brief
By an order dated July 7, 2022, RBI imposed a penalty of ₹37,50,000 on The Maharashtra State Co-operative Bank Ltd., Mumbai. The bank was found non-compliant with NABARD's 'Frauds - Guidelines for Classification, Reporting and Monitoring' after a statutory inspection and subsequent examination of related correspondence. RBI issued a show-cause notice, considered the bank's response, and concluded that the violation was substantiated under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty on The Maharashtra State Co-operative Bank Ltd., Mumbai for non-compliance with directions issued by NABARD on 'Frauds - Guidelines for Classification, Reporting and Monitoring'. The action followed a statutory inspection with reference to the bank's financial position as on March 31, 2019, which revealed non-compliance. After a show-cause notice and consideration of the bank's reply, RBI concluded the charge was substantiated and warranted 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 financial penalty and continue complying with NABARD/RBI fraud classification, reporting and monitoring requirements. The order does not invalidate customer transactions, but it signals regulatory non-compliance and may increase supervisory scrutiny going forward.
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 37.5 L
- Order Date
- 7 Jul 2022
- Effective From
- 7 Jul 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank