Recorded RBI impact
Fine: Rs 45.0 L
Monetary penalty · Fresh imposition
Published by RBI
29 May 2020
Case Brief
By order dated May 27, 2020, RBI imposed a monetary penalty of Rs 45 lakh on TJSB Sahakari Bank Limited. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after RBI’s inspection (with reference to the bank’s financial position as on March 31, 2018) found non-compliance with RBI directions on Income Recognition and Asset Classification (IRAC) norms. RBI issued a show-cause notice, considered the bank’s reply and submissions, and concluded that the charge was established.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after its inspection found the bank had failed to adhere to RBI directions on IRAC norms. RBI stated the action was based on deficiencies in regulatory compliance and that the penalty was not intended to pronounce on the validity of any transaction or agreement with customers.
Operating Impact
The bank must absorb the monetary penalty; the order does not itself impose an operational restriction, but it signals regulatory deficiencies and may affect supervisory scrutiny. Customers are not directly restricted by this order, and RBI clarified that the action does not pronounce on the validity of transactions or agreements with customers.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 45.0 L
- Order Date
- 27 May 2020
- Effective From
- 27 May 2020
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank