RBI imposes monetary penalty on Krishna Sahakari Bank Ltd., Satara

Case Brief

By an order dated May 19, 2023, RBI imposed a monetary penalty of Rs 1 lakh on Krishna Sahakari Bank Ltd., Satara. The penalty was imposed for contravention of RBI directions on Maintenance of Deposit Accounts, based on inspection findings that the bank collected fixed penal charges for shortfall in minimum balance in savings accounts instead of charging proportionately to the extent of shortfall, and failed to issue the required notice about penal charges becoming applicable if the minimum balance was not restored within one month. RBI stated that the action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, and that it did not pronounce on the validity of any transaction or agreement with customers.