Recorded RBI impact
Fine: Rs 4.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Aug 2019
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹4.00 lakh on The Ojhar Merchants’ Co-operative Bank Ltd., Ojhar, Dist- Nasik, Maharashtra under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found that the bank had violated directives/instructions/guidelines relating to director-related advances and declaration of dividend by an urban co-operative bank. After issuing a show cause notice and considering the bank’s written reply, RBI concluded that the violations were substantiated and merited 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), after finding that the bank had violated RBI directives/instructions/guidelines relating to director related advances and declaration of dividend by an urban co-operative bank. The bank had received a show cause notice and submitted a written reply, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty; the release does not mention any additional operational restriction or ongoing remedial direction. The action is a compliance sanction and may affect supervisory scrutiny, but no direct customer-facing restriction is stated.
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 4.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank