Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
2 Jan 2019
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5,00,000 on The Mechanical Department Primary Urban Co-operative Bank Ltd., Gorakhpur (U.P.) under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated RBI instructions/guidelines on the inspection and audit system in UCBs and supervisory instructions issued under Section 36(1) of the Act. After a show-cause notice and the bank’s written reply, RBI concluded the violations were substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after concluding that the bank had violated RBI instructions/guidelines on the inspection and audit system in urban co-operative banks and supervisory instructions issued under Section 36(1) of the Act. The bank had received a show-cause notice and submitted a written reply, but RBI found the violations substantiated and warranting penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not describe any operational restriction, but it records RBI’s adverse finding and enforcement action against the co-operative bank. No direct deadline or customer-level restriction is stated.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
- Section 36(1) 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