RBI imposes monetary penalty on Madhya Pradesh Rajya Sahakari Bank Maryadit, Bhopal, Madhya Pradesh

Case Brief

By an order dated August 12, 2021, RBI imposed a monetary penalty of Rs 25 lakh on Madhya Pradesh Rajya Sahakari Bank Maryadit, Bhopal, Madhya Pradesh. The penalty was imposed for non-compliance with regulatory directions issued by NABARD in the framework titled “Review of Frauds - Guidelines on Monitoring and Reporting System”. RBI said the action followed a statutory inspection with reference to the bank’s financial position as on March 31, 2019, which revealed non-compliance in reporting of frauds, contrary to the applicable provisions of the Banking Regulation Act, 1949. After a show-cause notice, the bank’s reply, oral hearing, and written submissions were considered, RBI found the charge substantiated and imposed the penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Act.