Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
28 Dec 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1 lakh on Vidyanand Co-operative Bank Limited, Solapur, Maharashtra, by order dated December 07, 2023. RBI found, based on statutory inspection and examination of the Risk Assessment Report and related correspondence, that the bank had breached the prudential inter-bank gross exposure limit and had not complied with RBI directions on exposure norms, placement of deposits with other banks, and investments by primary urban co-operative banks. After a show-cause process and consideration of the bank's reply and oral submissions, RBI concluded that the non-compliance was substantiated and warranted penalty under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after its inspection and review of the Risk Assessment Report and related correspondence found that the bank had breached the prudential inter-bank gross exposure limit. The bank was issued a show-cause notice, and after considering its reply and oral submissions, RBI concluded that non-compliance with the cited RBI directions was substantiated. 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 bear the monetary penalty, and the finding records a compliance failure in its exposure and investment/deposit-placement practices. There is no restriction on operations described in this release beyond the financial penalty, but the bank remains accountable for aligning with RBI prudential directions going forward.
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 1.00 L
- Order Date
- 7 Dec 2023
- Effective From
- 7 Dec 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank