RBI imposes penalty on Limdi Urban Co-operative Bank for non-compliance

Mumbai (Maharashtra) [India], January 4 : Reserve Bank of India (RBI) on Thursday said that it has imposed a monetary penalty of Rs 50,000 on The Limdi Urban Co-operative Bank Limited, situated in Dahod, Gujarat.
RBI said that by an order dated December 13, 2023, it has imposed a penalty on the bank for non-compliance with its directions on '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.

Central bank said that in its statutory inspection of the bank with reference to its financial position as of March 31, 2022, and examination of the inspection report, risk assessment report and all correspondence, it revealed that the 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 directions, as stated therein," the RBI said.
RBI said 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 non-compliance was substantiated and warranted the imposition of a monetary penalty on the bank.