Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Sept 2022
Case Brief
RBI imposed a monetary penalty of ₹2.00 lakh on The Nicholson Co-operative Town Bank Ltd., (No.8), Thanjavur District, Tamil Nadu, by an order dated September 01, 2022. The penalty was imposed for non-adherence to RBI directions under Exposure Norms and Statutory / Other Restrictions for UCBs, after an inspection found breaches of prudential inter-bank exposure limits at the counterparty as well as gross level. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the non-compliance was substantiated and warranted the penalty under the Banking Regulation Act, 1949 (AACS).
Why RBI Acted
RBI imposed a monetary penalty after an inspection based on the bank’s financial position as on March 31, 2020 found breaches of prudential inter-bank exposure limits, both at the counterparty and gross level. The bank had failed to adhere to directions issued by RBI under Exposure Norms and Statutory / Other Restrictions for UCBs, and the contraventions were upheld after a show-cause notice, reply, and oral hearing. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Operating Impact
The bank must absorb the monetary penalty and ensure future compliance with RBI exposure norms and statutory restrictions. The action does not by itself restrict operations or customer access, but it signals continued supervisory scrutiny over prudential inter-bank exposure practices.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 1 Sept 2022
- Effective From
- 1 Sept 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank