Mumbai (Maharashtra) [India], January 4 : The Reserve Bank of India (RBI) on Thursday said that it has imposed a monetary penalty of Rs 5 lakh on Shree Bharat Co-operative Bank Limited, which is situated in Vadodara, Gujarat.
RBI said that by an order dated December 13, 2023, it has imposed a monetary penalty of Rs 5 lakh for non-compliance with the directions issued by them on 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)' and 'Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016'.
"This penalty has been imposed in the exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949," the press release said.
The central bank said that the statutory inspection of the co-operative bank conducted by it with reference to its financial position as of March 31, 2022, and examination of the inspection report, risk assessment report, and all correspondence revealed that the bank had breached the prudential inter-bank gross exposure limit as well as the prudential inter-bank counterparty exposure limit.
The RBI also said that the cooperative bank had not paid interest on matured term deposits from the date of maturity until the date of their repayment at the applicable rate.
"Consequently, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the said directions, as stated therein," the press release said.
RBI further mentioned that after considering the bank's reply to the notice and oral submissions made by it during the personal hearing, it came to the conclusion that the charge of noncompliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.
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