Recorded RBI impact
Fine: Rs 16.0 L
Monetary penalty · Fresh imposition
Published by RBI
24 Apr 2023
Case Brief
By order dated April 21, 2023, RBI imposed a monetary penalty of Rs 16.00 lakh on The Tamil Nadu State Apex Co-operative Bank Limited, Chennai. The action was taken for contravention of section 26A(2) read with section 56 of the Banking Regulation Act, 1949 and for non-compliance with NABARD directions on review of frauds and monitoring/reporting requirements. RBI said the statutory inspection revealed two lapses: failure to transfer eligible amounts to the Depositor Education and Awareness Fund within the prescribed period, and delayed reporting of a fraud to NABARD. After considering the bank's reply, further submissions, and oral submissions, RBI concluded the violations were substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, for contravention of section 26A(2) read with section 56 of the BR Act and for non-compliance with NABARD directions on 'Review of Frauds - Guidelines on Monitoring and Reporting System'. The statutory inspection found that the bank did not transfer eligible amounts to the Depositor Education and Awareness Fund in time and reported a fraud to NABARD after the prescribed timeline, with delay. After notice, reply, additional submissions, and personal hearing, RBI held the charges substantiated and imposed the penalty.
Operating Impact
The bank must bear the monetary penalty, and the order serves as a regulatory enforcement action for past non-compliance. There is no stated operational restriction, but the bank remains exposed to scrutiny over compliance with depositor fund transfers and fraud reporting obligations.
Regulatory Basis
- section 26 A (2) read with section 56 of the Banking Regulation Act, 1949
- section 47 A (1) (c) read with sections 46 (4) (i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 16.0 L
- Order Date
- 21 Apr 2023
- Effective From
- 21 Apr 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank