Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Oct 2012
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on Vyavasayik Evam Audyogik Sahakari Bank Maryadit, Morena (Madhya Pradesh), under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its directives/instructions/guidelines on credit exposure ceiling, maximum limit on unsecured advances, Know Your Customer (KYC) / Anti Money Laundering (AML), and submission of compliance to RBI's inspection report. After issuing a show-cause notice and considering the bank's written reply, RBI concluded the violations were substantiated and imposed the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after concluding that the bank had violated RBI directives/instructions/guidelines on credit exposure ceiling, maximum limit on unsecured advances, Know Your Customer (KYC) / Anti Money Laundering (AML), and submission of compliance to RBI's inspection report. A show-cause notice was issued and the bank submitted a written reply, but RBI found the violations substantiated and warranted penalty.
Operating Impact
The bank must absorb the penalty and address the compliance lapses identified by RBI, including credit exposure controls, unsecured lending limits, KYC/AML processes, and timely submission of inspection-report compliance. There is no stated operational restriction or licence impact in this release, but the bank remains exposed to further supervisory action if deficiencies persist.
Regulatory Basis
- 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 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank