Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
24 Jan 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on Vasai Janata Sahakari Bank Ltd., Dist. Palghar by order dated January 20, 2022. RBI said the bank contravened directions on 'Exposure Norms and Statutory / Other Restrictions – UCBs' by not adhering to the ceiling on advances to nominal members in certain cases. The penalty was imposed under the Banking Regulation Act, 1949, after considering the bank's reply to the show-cause notice.
Why RBI Acted
RBI imposed a monetary penalty after an inspection of the bank's financial position as on March 31, 2020 found non-compliance with RBI's directions on 'Exposure Norms and Statutory / Other Restrictions – UCBs'. The specific lapse cited was that the bank had not adhered to the ceiling on advances to nominal members in certain cases. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and ensure future compliance with RBI exposure norms, especially limits on advances to nominal members. The action does not itself impose an ongoing operational restriction, but it signals heightened regulatory scrutiny of the bank's lending practices.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 20 Jan 2022
- Effective From
- 20 Jan 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank