MANU/RPRL/0007/2024
Ministry : Reserve Bank of India
Department/Board : Press Release
Press Release No. : 2023-2024/1615
Date : 04.01.2024
Notification/ Circulars Referred :
'Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016' MANU/RMIC/0077/2016
Citing Reference:
'Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions,
2016' MANU/RMIC/0077/2016 Referred
RBI imposes monetary penalty on Shree Bharat Co-operative Bank Limited, Vadodara, Gujarat
The Reserve Bank of India (RBI) has, by an order dated December 13, 2023, imposed a monetary penalty of ₹5.00 lakh (Rupees Five lakh only) on Shree Bharat Co-operative Bank Limited, Vadodara, Gujarat (the bank) for non-compliance with the directions issued by RBI on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)' and 'Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016'. This penalty has been imposed in exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
This action is based on deficiencies in regulatory compliance and is not
intended to pronounce upon the validity of any transaction or agreement entered
into by the bank with its customers.
Background
The statutory inspection of the bank conducted by RBI with reference to its financial position as on March 31, 2022, and examination of the Inspection Report, Risk Assessment Report and all correspondence related thereto revealed, inter alia, that the bank had (i) breached the prudential inter-bank gross exposure limit as well as prudential inter-bank counterparty exposure limit; and (ii) not paid interest on matured term deposits from the date of maturity till the date of their repayment at the applicable rate. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for failure to comply with the said directions, as stated therein.
After considering the bank's reply to the notice and oral submissions made
by it during the personal hearing, RBI came to the conclusion that the charge of
non-compliance with the aforesaid RBI directions was substantiated and warranted
imposition of monetary penalty on the bank.
(Yogesh Dayal)
Chief General Manager