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Urban Co-operative Bank Limited, Maunath Bhanjan

Co-operative bankMaunath Bhanjan

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 5.00 L

Monetary penalty · Fresh imposition

S2

Published by RBI

15 Apr 2024

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Urban Co-operative Bank Limited, Maunath Bhanjan, by order dated March 29, 2024. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following a statutory inspection and show-cause proceedings. RBI found that the bank had not complied with prohibitory directions issued under the Supervisory Action Framework for Primary (Urban) Co-operative Banks, specifically by offering higher interest rates on term and savings deposits than those offered by State Bank of India. RBI clarified that the penalty is based on regulatory non-compliance and does not pronounce on the validity of customer transactions.

Why RBI Acted

Capital & exposure normsReporting & disclosure

RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after a statutory inspection (with reference to the bank's financial position as on March 31, 2022) and a show-cause process. The bank was found to have failed to comply with RBI directions issued under the Supervisory Action Framework for Primary (Urban) Co-operative Banks, including specific instructions that it should not offer higher interest rates on term and savings deposits than those offered by State Bank of India.

Operating Impact

The bank must absorb the penalty and continue complying with RBI’s SAF directions. The order does not itself impose a new operational restriction, but it signals ongoing supervisory scrutiny and leaves RBI free to initiate additional action if warranted. Depositors are not directly affected by this penalty order, though the underlying compliance issues remain relevant to the bank’s regulatory standing.

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 5.00 L
Order Date
29 Mar 2024
Effective From
29 Mar 2024
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank