Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
26 Nov 2021
Case Brief
By order dated November 26, 2021, RBI imposed a monetary penalty of Rs 1.00 lakh on The Modasa Nagarik Sahakari Bank Ltd., Aravalli, Gujarat. The action followed a statutory inspection with reference to the bank's financial position as on March 31, 2019, which revealed non-compliance with RBI directions on loans and advances to directors, relatives, and firms/concerns in which they are interested. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the charge was substantiated under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found non-compliance with RBI directions on loans and advances to directors, relatives, and firms/concerns in which they are interested. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after RBI considered the bank's reply and oral submissions and concluded the charge was substantiated.
Operating Impact
The bank must absorb the monetary penalty; the release does not indicate any suspension or operational restriction beyond the fine. The action serves as a compliance warning for the bank and does not itself alter customer operations or transaction validity.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 26 Nov 2021
- Effective From
- 26 Nov 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank