Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Jan 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on The Makarpura Industrial Co-operative Bank Ltd., Vadodara under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated directives/guidelines on advances to directors and their relatives, single borrower exposure ceiling, donation ceiling of 1%, KYC requirements, CTR/STR reporting for cash transactions above Rs 10 lakh, and submitted wrong compliance information in response to a previous inspection report. After issuing a show-cause notice and considering the bank's written reply, RBI concluded that the violations were substantiated and penalty was justified.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after finding substantiated violations of directives/guidelines relating to advances to directors and their relatives, the single borrower exposure ceiling, the 1% donation ceiling, non-implementation of KYC norms, non-submission of CTR/STR for cash transactions above Rs 10 lakh, and submission of wrong compliance in respect of a previous inspection report. The bank had received a show-cause notice and submitted a written reply, but RBI concluded the violations warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and tighten compliance controls around lending to connected parties, exposure limits, donations, KYC/AML reporting, and supervisory reporting. There is no indication of a business restriction or operational ban in this release, so day-to-day operations continue subject to regulatory compliance obligations.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank