The Reserve Bank of India (RBI) has taken stringent action against G P Parsik Sahakari Bank Ltd., located in Thane, by imposing a monetary penalty of ₹26.60 lakh. This penalty, announced through an order dated February 7, 2024, stems from the bank’s non-compliance with RBI directives related to ‘Customer Protection – Limiting Liability of Customers of Co-operative Banks in Unauthorised Electronic Banking Transactions’ and ‘Basic Savings Bank Deposit Account’ (BSBD Account). The penalty is exercised under the regulatory powers vested in the RBI through the Banking Regulation Act, 1949.
Regulatory Breach and Penalty Basis
The penalty, amounting to ₹26.60 lakh, is enforced under the provisions of section 47A(1)(c) in conjunction with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The regulatory breach involves the bank’s failure to comply with guidelines on customer protection concerning unauthorized electronic transactions and the treatment of Basic Savings Bank Deposit Accounts (BSBD Accounts).
Background and Inspection Findings
The RBI’s scrutiny of G P Parsik Sahakari Bank Ltd. was conducted through a statutory inspection focusing on its financial position as of March 31, 2022. The examination included a thorough assessment of the Risk Assessment Report, Inspection Report, and associated correspondence. Notably, the bank was found to have not credited amounts involved in specific unauthorized electronic transactions into customer accounts within the stipulated 10 working days from customer notifications. Additionally, the bank levied charges for ATM card issuance and annual maintenance in BSBD Accounts.
RBI’s Decision-Making Process
Following the findings, the bank received a notice from the RBI, prompting a show cause for why a penalty should not be imposed for non-compliance with the specified directives. After evaluating the bank’s response to the notice, additional submissions, and oral presentations during a personal hearing, the RBI concluded that the charge of non-compliance was substantiated. This led to the imposition of the ₹26.60 lakh monetary penalty.
