Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
9 May 2024
Case Brief
The RBI, by order dated May 06, 2024, imposed a monetary penalty of ₹50,000 on Thoothukudi District Central Co-operative Bank Ltd., Thoothukudi, Tamil Nadu. The action followed a NABARD statutory inspection and a show-cause process, after which RBI held that the bank had delayed reporting a fraud to NABARD and had not complied with the directions on ‘Frauds - Guidelines for Classification, Reporting and Monitoring’. The penalty was imposed 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 by NABARD found non-compliance with NABARD directions on ‘Frauds - Guidelines for Classification, Reporting and Monitoring’. A show-cause notice was issued, and after considering the bank’s reply and oral submissions, RBI found that the charge of delay in reporting of fraud to NABARD was sustained, warranting the penalty 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 remain prepared for any additional action RBI may initiate, as the press release states this penalty is without prejudice to other proceedings. No operational restriction is imposed by this order, but the bank remains under supervisory scrutiny for fraud-reporting compliance.
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
- 6 May 2024
- Effective From
- 6 May 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank