RBI imposes Rs.2.50 Lakh Monetary Penalty on Sahakari Bank; Check Name of the Bank

The Reserve Bank of India (RBl) imposed a monetary penalty of 2.50 lakh (Rupees Two lakh and fifty Thousand only) on Bilaspur Nagrik Sahakari Bank Ltd Bilaspur, Chhattisgarh (the bank) in an order dated May 18, 2022 for contravention of/ non-adherence with the RBI Directions issued to Urban Cooperative Banks on Exposure Norms & Statutory/Other Restrictions-UCBs. This penalty was imposed in the exercise of RBI’s powers under Section 47 A (1) (c) read with Section 46 (4) I and Section 56 of the Banking Regulation Act, 1949, taking into consideration the bank’s failure to follow the aforementioned RBI orders.

This action is based on regulatory compliance problems and is not intended to call into question the legitimacy of any transaction or agreement entered into by the bank with its clients.

Background

The bank’s inspection report revealed, among other things, that the bank had not adhered to the prudential inter-bank (Gross) exposure limit and had not complied with the prudential inter-bank Counter Party limit in contravention of/non-compliance with the RBI’s directions on Exposure Norms & Statutory/Other Restrictions-UCBs. Based on this, a Notice was given to the bank, directing it to show cause why a penalty should not be levied for failing to follow the directives.

After considering the bank’s replies and oral submissions made during personal hearing, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions were substantiated and warranted imposition of monetary penalty.