Recorded RBI impact
Fine: Rs 6.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Mar 2024
Case Brief
RBI, by order dated March 05, 2024, imposed a monetary penalty of Rs 6.00 lakh on The Mandi Urban Co-operative Bank Ltd., Mandi, Himachal Pradesh. The penalty was based on supervisory findings from a select scope inspection with reference to the bank’s financial position as on March 31, 2022, which found non-compliance with RBI directions on placement of deposits with other banks by Primary (Urban) Co-operative Banks. RBI also sustained the charge that the bank breached prudential inter-bank exposure limits on a gross as well as counterparty basis. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a select scope inspection found that the bank had failed to comply with RBI directions on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’. The supervisory findings, together with related correspondence and the bank’s reply to the show-cause notice, led RBI to sustain the charge of breaching prudential inter-bank exposure limits on both gross and counterparty basis. The penalty was imposed 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 and may face further RBI action, as the release notes the fine is without prejudice to any other proceedings. There is no stated restriction on operations or customer services beyond the monetary penalty.
Regulatory Basis
- section 47A(1)(c)
- sections 46 (4)(i)
- section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 6.00 L
- Order Date
- 5 Mar 2024
- Effective From
- 5 Mar 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank