Recorded RBI impact
Fine: Rs 3.00 L
Monetary penalty · Fresh imposition
Published by RBI
15 Apr 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹3.00 lakh on United Mercantile Urban Co-operative Bank Limited, Kanpur, after a statutory inspection and enforcement process found non-compliance with RBI directions issued under the Supervisory Action Framework (SAF) for Primary (Urban) Co-operative Banks. RBI noted that the bank had offered higher interest rates on term and savings deposits than those offered by State Bank of India, contrary to specific directions under SAF. 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 and subsequent show-cause proceedings found that the bank had failed to comply with directions issued under the Supervisory Action Framework (SAF) for Primary (Urban) Co-operative Banks. In particular, RBI sustained the charge that the bank offered higher interest rates on term and savings deposits than those offered by State Bank of India, in contravention of specific SAF directions. 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 remain subject to any existing RBI supervisory requirements. The action does not invalidate customer transactions or agreements, and RBI has clarified that it is without prejudice to any further action that may be taken.
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 3.00 L
- Order Date
- 30 Mar 2024
- Effective From
- 30 Mar 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank