Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
18 Apr 2024
Case Brief
By order dated March 30, 2024, RBI imposed a monetary penalty of ₹5.00 lakh on Zila Sahakari Bank Ltd., Garhwal, Kotdwar, Uttarakhand for contravention of section 20(1)(b) and section 26A(2) read with section 56 of the Banking Regulation Act, 1949. The penalty followed a statutory inspection by NABARD and a subsequent show-cause process. RBI held that the bank had not transferred eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time limit and had sanctioned a loan to its director when it was prohibited.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory review found two sustained contraventions of the Banking Regulation Act, 1949: failure to transfer eligible unclaimed amounts to the Depositor Education and Awareness Fund within the prescribed time limit, and sanctioning a loan to its director despite the prohibition. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must absorb the monetary penalty and address the compliance lapses identified by RBI. The action does not by itself impose a forward operating restriction, but RBI has noted that further action may be initiated separately if warranted.
Regulatory Basis
- section 20(1)(b)
- section 26A(2) read with section 56
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 30 Mar 2024
- Effective From
- 30 Mar 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank