Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
15 Apr 2024
Case Brief
By order dated March 27, 2024, RBI imposed a monetary penalty of ₹5.00 lakh on The Nagar Sahkari Bank Ltd., Maharajganj for non-compliance with specific directions issued under the Supervisory Action Framework (SAF). The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after inspection findings showed that the bank had incurred operating expenses on gifting silver coins to shareholders despite RBI directions to curtail operating and administrative expenses to the maximum extent possible. RBI noted that the action is based on regulatory deficiencies and does not pronounce on customer transactions.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection found non-compliance with RBI directions and related correspondence. In particular, the bank was found to have incurred operating expenses on gifting silver coins to shareholders even though RBI had issued specific directions under SAF to curtail operating and administrative expenses to the maximum extent possible.
Operating Impact
The bank must absorb the monetary penalty and address the compliance lapse identified by RBI. The order does not itself impose a new operational restriction, but it signals supervisory concern and leaves RBI free to initiate further action if warranted. Customers are not directly restricted by this release, though the bank remains under regulatory scrutiny.
Regulatory Basis
- section 47A(1)(c)
- sections 46(4)(i)
- section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 27 Mar 2024
- Effective From
- 27 Mar 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank