Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Nov 2018
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹2 lakh on The Nellore Co-operative Urban Bank Ltd., Nellore, Andhra Pradesh, under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was imposed after RBI found that the bank had violated supervisory restrictions placed on it under the revised Supervisory Action Framework (SAF). RBI had issued a show-cause notice, examined the bank's written reply, and held a personal hearing before concluding that the violations were substantiated and merited 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) because the bank violated supervisory restrictions imposed on it under the revised Supervisory Action Framework (SAF). RBI issued a show-cause notice, considered the bank's written reply and personal hearing, and concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must bear the monetary penalty of ₹2 lakh, but the release does not describe any new operational restriction beyond the existing SAF-related supervisory restrictions that were allegedly violated. The immediate impact is financial and reputational for the bank; the text does not state any direct change for customers or depositors.
Regulatory Basis
- Section 47A (1) (c) read with Section 46 (4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank