RBI imposes penalty on The Financial Cooperative Bank Ltd., Surat (Gujarat)


 

The Reserve Bank of India has imposed a monetary penalty of Rs 1.00 lakh (Rupees one lakh only) on The Financial Cooperative Bank Ltd., Surat (Gujarat).

The penalty was imposed by RBI, in exercise of the powers vested in it under the provisions of Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies),

The monetary penalty was for violation of the RBI instructions by exceeding the ceiling prescribed for inter-bank deposit exposure limit.

The current RBI rules for Inter-bank Exposure Limit of co-operative banks is as under

Prudential Inter-bank (Gross) Exposure Limit

2.4.1 The total amount of deposits placed by an UCB with other banks (inter-bank) for all purposes including call money / notice money, and deposits, if any, placed for availing clearing facility, CSGL facility, currency chest facility, remittance facility and non-fund based facilities like Bank Guarantee (BG), Letter of Credit (LC), etc shall not exceed 20% of its total deposit liabilities as on March 31 of the previous year.

The balances held in deposit accounts with commercial banks and in permitted scheduled UCBs and investments in Certificate of Deposits issued by commercial banks, being inter bank exposures, will be included in this 20% limit.

Prudential Inter-bank Counter Party Limit

2.4.2  Within the prudential inter-bank (gross) exposure limit, deposits with any single bank should not exceed 5% of the depositing bank’s total deposit liabilities as on March 31 of the previous year.

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