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The Shirpur Peoples’ Co-operative Bank Ltd., Shirpur (Maharashtra)

Co-operative bankShirpur, Maharashtra

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 3.00 L

Monetary penalty · Fresh imposition

S2

Published by RBI

9 Jan 2023

Case Brief

By order dated January 04, 2023, RBI imposed a monetary penalty of ₹3.00 lakh on The Shirpur Peoples’ Co-operative Bank Ltd., Shirpur (Maharashtra). 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 RBI found that the bank had sanctioned advances to a group of borrowers above the permissible limit, failed to comply with Income Recognition and Asset Classification (IRAC) norms, and did not have robust software to identify and monitor suspicious transactions. RBI stated that the action was based on deficiencies in regulatory compliance and was not intended to pronounce on the validity of any transaction or agreement with customers.

Why RBI Acted

Lending normsReporting & disclosureKYC / AML

RBI imposed a monetary penalty of ₹3 lakh on The Shirpur Peoples’ Co-operative Bank Ltd., Shirpur (Maharashtra) under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949. The bank was found to have sanctioned advances to a group of borrowers above the permissible limit, not complied with Income Recognition and Asset Classification (IRAC) norms, and lacked robust software to identify and monitor suspicious transactions, contrary to RBI directions for Urban Co-operative Banks on Exposure Norms and Statutory/Other Restrictions, IRAC, and KYC.

Operating Impact

The bank must absorb the financial penalty, while the RBI action also signals compliance deficiencies in lending limits, asset classification, and KYC/transaction-monitoring controls. There is no stated restriction on ongoing business operations, but the findings may require the bank to strengthen governance, credit, IRAC, and AML/KYC systems.

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 3.00 L
Order Date
4 Jan 2023
Effective From
4 Jan 2023
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank