Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
24 Sept 2012
Case Brief
The Reserve Bank of India penalised The Talod Nagarik Sahakari Bank Ltd., Talod, Dist. Sabarkantha (Gujarat), under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The violation related to RBI instructions governing declaration and disbursal of dividend to shareholders, contrary to operational instructions dated March 25, 2011. After issuing a show-cause notice and considering the bank’s reply and personal submissions, RBI concluded that the contravention was substantiated and imposed a penalty of Rs 5 lakh.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after concluding that the bank violated RBI instructions on declaration and disbursal of dividend to shareholders. The bank had received a show-cause notice, submitted a written reply, and made personal submissions; RBI held that the violation was substantiated and warranted penalty.
Operating Impact
The bank must bear the financial penalty and the regulatory finding of non-compliance remains on record. The action does not itself impose an operating ban, but it signals continued supervisory expectations around compliance with RBI’s dividend-related instructions.
Regulatory Basis
- Section 47A (1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 25 Mar 2011
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank