RBI imposes monetary penalty on Municipal Co-operative Bank Limited, Mumbai

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹2 lakh on Municipal Co-operative Bank Limited, Mumbai by order dated June 18, 2021. The penalty was for non-compliance with RBI directions on Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks, under Sections 47A(1)(c), 46(4)(i) and 56 of the Banking Regulation Act, 1949. RBI’s inspection report, based on the bank’s financial position as on March 31, 2019, found that the bank had not conducted annual review of inoperative accounts and that fraud had occurred in relation to inoperative accounts. After examining the bank’s written reply and oral submissions, RBI concluded that the contravention was substantiated and warranted monetary penalty.