Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
23 Jun 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on The Prerana Co-operative Bank Ltd., Pune, Maharashtra. The penalty was levied under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) for violation of RBI directives on unsecured advances. RBI issued a show-cause notice, considered the bank's written reply and personal hearing submissions, and concluded that the violations were substantiated.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after concluding that the bank had violated Reserve Bank directives on unsecured advances. The bank had received a show-cause notice, submitted a written reply, and was heard personally; RBI found the violations substantiated and worthy of penalty.
Operating Impact
The bank must absorb the monetary penalty; the action does not indicate a suspension or restriction on current operations. The penalty serves as a regulatory enforcement signal for compliance with unsecured-advance norms.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank