Recorded RBI impact
Fine: Rs 4.00 L
Monetary penalty · Fresh imposition
Published by RBI
17 Oct 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹4.00 lakh on The Rajgurunagar Sahakari Bank Limited, Pune, by an order dated October 14, 2022. RBI said the bank contravened its directions on Interest Rate on Deposits, specifically by not paying interest on balance amounts lying in current accounts of deceased individual depositors and sole proprietorship concerns when making payments to claimants. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after a show-cause process confirmed the non-compliance.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, for contravention of RBI directions on Interest Rate on Deposits. The inspection for the bank's financial position as of March 31, 2021 found that it did not pay interest on balance amounts lying in current accounts of deceased individual depositors/sole proprietorship concerns while making payments to the claimants. After a show-cause notice and consideration of the bank's reply, RBI concluded that the non-compliance was substantiated and warranted penalty.
Operating Impact
The bank must absorb the penalty and ensure future compliance with RBI directions on interest payments for deceased depositors' accounts. The action does not indicate a broader operating restriction, but it signals heightened regulatory scrutiny over customer-interest compliance and deposit-related procedures.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 4.00 L
- Order Date
- 14 Oct 2022
- Effective From
- 14 Oct 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank