Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
14 Nov 2024
Case Brief
By an order dated November 04, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on The Vijapur Nagarik Sahakari Bank Ltd., Vijapur, Dist. Mehsana, Gujarat. The penalty was based on supervisory findings of non-compliance with RBI directions on placement of deposits with other banks by primary urban co-operative banks and on Know Your Customer requirements. RBI said the bank failed to adhere to the prudential inter-bank exposure limit and failed to follow Customer Due Diligence procedures while establishing account-based relationships in certain accounts. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory findings showed non-compliance with directions on ‘Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)’ and ‘Know Your Customer’. RBI found that the bank failed to adhere to the prudential inter-bank (counterparty) exposure limit and did not follow Customer Due Diligence (CDD) procedure while establishing account-based relationships in certain accounts. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and address the compliance gaps identified by RBI. The action does not by itself restrict operations, but the bank remains exposed to any further supervisory or enforcement action RBI may choose to initiate.
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 1.00 L
- Order Date
- 4 Nov 2024
- Effective From
- 4 Nov 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank