Recorded RBI impact
Fine: Rs 5.96 L
Monetary penalty · Fresh imposition
Published by RBI
16 Dec 2024
Case Brief
By an order dated December 12, 2024, RBI imposed a monetary penalty on Vaishya Sahakari Bank Ltd., Mumbai, Maharashtra for non-compliance with RBI directions on Priority Sector Lending (PSL) targets and classification, including specific directions to contribute to the MSE Refinance Fund administered by SIDBI for a PSL shortfall in FY 2022-23. RBI noted that the bank failed to deposit the prescribed amount within the stipulated time and continued to remain non-compliant even after receiving a cautionary letter. After considering the bank's reply and oral submissions in a personal hearing, RBI concluded that the charge was sustained and that a monetary penalty was warranted under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The bank had been specifically directed to deposit a certain amount into the MSE Refinance Fund administered by SIDBI against its shortfall in achievement of PSL targets for FY 2022-23. After it failed to make the deposit, RBI issued a cautionary letter advising compliance, but the bank still did not deposit the amount within the prescribed time. RBI sustained the charge after considering the bank's reply and oral submissions, and imposed the penalty for regulatory non-compliance.
Operating Impact
The bank must bear the monetary penalty of ₹5.96 lakh and remains exposed to any further regulatory action RBI may choose to initiate for the same or related compliance lapses. The release does not impose a new operating restriction, but it underscores ongoing obligations to comply with PSL directions and any prescribed contributions to the MSE Refinance Fund.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 5.96 L
- Order Date
- 12 Dec 2024
- Effective From
- 12 Dec 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank