RBI imposes monetary penalty on The Limdi Urban Co-operative Bank Limited, Limdi, dist. Dahod, Gujarat

Case Brief

By an order dated December 13, 2023, RBI imposed a monetary penalty of Rs 50,000 on The Limdi Urban Co-operative Bank Limited, Limdi, dist. Dahod, Gujarat. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for non-compliance with the Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016. RBI’s inspection found that the bank had not paid interest on matured term deposits from the date of maturity until the date of repayment at the applicable rate. After the show-cause process, RBI held the charge to be substantiated and imposed the penalty. The release also states that the action is based on deficiency in regulatory compliance and does not pronounce upon the validity of any transaction or agreement with customers.