Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
12 Apr 2013
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1 lakh on Unjha Nagrik Sahakari Bank Ltd., Mehsana (Gujarat). RBI said the bank violated Section 14A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) and RBI's directives/guidelines on Individual and Group Exposure Limits. The penalty was imposed under Section 47A(1)(b) read with Section 46(4) of the Act, after the bank's written reply and personal submissions were considered and the violation was found substantiated.
Why RBI Acted
RBI imposed a monetary penalty after finding that Unjha Nagrik Sahakari Bank Ltd., Mehsana (Gujarat) had violated Section 14A of the Banking Regulation Act, 1949 (as applicable to co-operative societies) and the Reserve Bank's directives/guidelines on Individual and Group Exposure Limits. The bank had received a show-cause notice, submitted a written reply, and made personal submissions, but RBI concluded that the violation was substantiated and warranted penalty under Section 47A(1)(b) read with Section 46(4) of the Act.
Operating Impact
The bank must absorb the financial penalty and ensure future compliance with exposure-limit requirements and the relevant provisions of the Banking Regulation Act. No operational restriction or licence action was announced, but the case signals continued regulatory scrutiny of the bank's lending/exposure practices.
Regulatory Basis
- Section 14A of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
- Section 47A (1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank