Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
15 Jul 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty on Udyam Vikas Sahakari Bank Limited, Pune by order dated July 15, 2021. The penalty was levied for contravention of RBI directions on Exposure Norms and Statutory / Other Restrictions applicable to UCBs, after inspection findings showed the bank had not adhered to the prudential inter-bank gross exposure limit and the prudential inter-bank single counterparty limit. RBI issued a notice, considered the bank’s reply, and found the violations substantiated under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
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 an inspection based on the bank’s financial position as on March 31, 2019 found non-adherence to RBI’s directions on Exposure Norms and Statutory / Other Restrictions for UCBs. The specific lapses cited were failure to adhere to the prudential inter-bank gross exposure limit and the prudential inter-bank single counterparty limit. After issuing a show-cause notice and considering the bank’s reply, RBI concluded that the charges were substantiated and warranted penalty.
Operating Impact
The bank must absorb the ₹2 lakh penalty and ensure future compliance with RBI exposure norms, including inter-bank gross exposure and single counterparty limits. The action does not affect the validity of customer transactions, but it underscores supervisory scrutiny over the bank’s regulatory compliance.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 15 Jul 2021
- Effective From
- 15 Jul 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank