Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
14 Oct 2024
Case Brief
By an order dated October 07, 2024, RBI imposed a monetary penalty of Rs 50,000 on The Urban Co-operative Bank Limited, Dharangaon, Maharashtra. The action followed a statutory inspection with reference to the bank’s financial position as on March 31, 2023 and supervisory findings of non-compliance with RBI instructions issued under the Supervisory Action Framework (SAF). RBI stated that the bank had incurred capital expenditure without prior approval of RBI, contrary to the directions issued under SAF, and imposed the penalty under the Banking Regulation Act, 1949.
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, after supervisory findings showed non-compliance with RBI instructions issued under SAF. The sustained charge was that the bank had incurred capital expenditure without prior approval of RBI in violation of the SAF directions.
Operating Impact
The bank must absorb the monetary penalty and ensure future compliance with RBI directions under SAF, including obtaining prior approval before undertaking capital expenditure where required. The release does not announce any operational restriction beyond the fine, but RBI notes that further action may still be initiated separately.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 7 Oct 2024
- Effective From
- 7 Oct 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank