Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Sept 2023
Case Brief
By an order dated August 23, 2023, RBI imposed a monetary penalty of Rs 2 lakh on The State Transport Co-operative Bank Ltd., Mumbai, Maharashtra. The penalty was for non-compliance with RBI directions on the Depositor Education and Awareness Fund Scheme, 2014. RBI’s statutory inspection found that the bank failed to transfer amounts eligible for transfer to the Depositor Education and Awareness Fund. After considering the bank’s reply and oral submissions, RBI concluded that the contravention was established and warranted the penalty. RBI also clarified that the action was based on regulatory compliance deficiencies and did not pronounce on the validity of any transaction or agreement with customers.
Why RBI Acted
RBI imposed a monetary penalty on The State Transport Co-operative Bank Ltd., Mumbai, Maharashtra for non-compliance with RBI directions on the Depositor Education and Awareness Fund Scheme, 2014. RBI said its inspection revealed that the bank failed to transfer amounts that were eligible for transfer to the Fund, and after considering the bank’s reply and oral submissions, concluded that the charge of non-compliance was substantiated.
Operating Impact
The bank must absorb the monetary penalty and may face continued supervisory scrutiny over compliance with RBI directions on depositor fund transfers. The action does not by itself alter customer contracts, but it underscores the bank’s obligation to correctly identify and transfer eligible amounts to the Depositor Education and Awareness Fund going forward.
Regulatory Basis
- Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 23 Aug 2023
- Effective From
- 23 Aug 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank