RBI imposes monetary penalty on The Nasik Merchant's Co-operative Bank Ltd., Nashik

Case Brief

RBI, by order dated July 07, 2022, imposed a monetary penalty of ₹50.00 lakh on The Nasik Merchant's Co-operative Bank Ltd., Nashik for non-compliance with RBI directions on ‘Placement of deposits with other banks’ and ‘Interest Rate on Deposits’. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after inspections found the bank had continued prohibited acceptance of fresh deposits in existing accounts of other non-scheduled UCBs, had not fully phased out such inter-bank deposits by the required date, had opened a new current account of a non-scheduled UCB and accepted deposits in it, and had not paid applicable interest on deposits in certain deceased depositor/sole proprietorship current accounts until claims were settled.