The Reserve Bank of India has imposed a monetary penalty of Rs. 5.00 lakh (Rupees Five Lakh only) on Prime Co-operative Bank Ltd., Surat (Gujarat) 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), for violation of various RBI instructions relating to issuance of Demand Draft/Pay Order by the bank during the period from April 1, 2010 to March 31, 2013.

The Reserve Bank of India had issued a Show Cause Notice to the bank in response to which the bank submitted a written reply. After considering the facts of the case, the bank’s reply and also the personal submissions made by the bank in the matter, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty.

Sucheta Vazkar

Manager

Regulatory sanction for violation of RBI instructions leads to monetary penalty on cooperative bank for improper demand draft issuance. The Reserve Bank exercised its enforcement powers under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act to impose a monetary penalty on Prime Co operative Bank Ltd., Surat for violations of RBI instructions concerning issuance of Demand Drafts and Pay Orders during April 1, 2010 to March 31, 2013, after serving a Show Cause Notice, considering the bank's written reply and personal submissions and concluding the contraventions were substantiated.