Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
16 Apr 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Mehkar Urban Co-operative Bank Ltd., Mehkar, by order dated April 16, 2021. RBI found that the bank had contravened/non-complied with directions issued to urban co-operative banks on Board of Directors and Exposure Norms and Statutory/Other Restrictions, based on inspection findings as of March 31, 2019. After issuing a show-cause notice and considering the bank’s written reply and oral submissions, RBI concluded that the charge was substantiated and imposed the penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 because the bank failed to adhere to RBI directions applicable to urban co-operative banks on Board of Directors and Exposure Norms and Statutory/Other Restrictions. The inspection report for the bank’s financial position as of March 31, 2019 found these regulatory breaches, and RBI concluded the charge was substantiated after considering the bank’s replies and oral submissions.
Operating Impact
The bank must absorb the penalty and continue complying with RBI directions on governance and exposure-related restrictions. The action has no stated customer-level transaction invalidation, but it signals ongoing regulatory scrutiny of the bank’s compliance framework.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 16 Apr 2021
- Effective From
- 16 Apr 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank