RBI imposes monetary penalty on Mahila Co-operative Nagrik Bank Ltd., Bharuch, Gujarat

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹2.00 lakh on Mahila Co-operative Nagrik Bank Ltd., Bharuch, Gujarat, by order dated September 18, 2023. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection and review of related reports and correspondence. RBI said the bank had not complied with directions on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)' and 'Know Your Customer (KYC)'. The inspection found breaches of inter-bank gross and counterparty exposure limits and a failure to review the risk categorization of accounts at the prescribed periodicity. RBI concluded that the charges of non-compliance were substantiated and that a monetary penalty was warranted. The release notes that the action is based on regulatory deficiencies and is not intended to pronounce upon the validity of any transaction or agreement with customers.