CAIIB BRBL Module C Unit 8 : Offences And Penalties

CAIIB Paper 4 BRBL Module C Unit 8 : Offences And Penalties (New Syllabus) 

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Paper 4 (BANKING REGULATIONS AND BUSINESS LAWS) includes an important topic called “Offences And Penalties”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Paper 4 (BRBL) Module C (IMPORTANT ACTS/LAWS & LEGAL ASPECTS OF BANKING OPERATIONS – PART B) Unit 8 : Offences And Penalties, Aspirants must go through this article to better understand the topic, Offences And Penalties and practice using our Online Mock Test Series to strengthen their knowledge of Offences And Penalties. Unit 8 : Offences And Penalties


  • Section 23 of the Act provides for filing of the particulars of charge created. Section 24 provides for modification of the charge filed and the Section 25 provides that the satisfaction of the charge has to be intimated to the central registrar.
  • If the securitization or reconstruction company or the secured creditor fails to perform any of the duties as stated above, the company and the officers concerned for the default, as per provisions of this section, are punishable with a fine that may extend to five thousand rupees for each day during which the default continues.
  • These provisions were existing before amendment to the Act carried out in 2016 and have since been omitted.

Penalties For Non-compliance Of Directions Of Reserve Bank Of India

  • Under the Section 12 or 12A of the SARFAESI Act, the Reserve Bank of India is statutorily empowered to issue directions to the securitization or reconstruction company. If any such company fails to comply with any of the directions issued by the Reserve Bank of India, then such company is punishable with a fine not exceeding Rs. 5 lakh for the default. In case of further continuation of the offence, an additional fine up to Rs. 10,000 per day of the default can be imposed.
  • These provisions were existing before amendment to the Act carried out in 2016 and have since been omitted.


If any person:

  • Contravenes, or
  • Attempts to contravene, or
  • Abets the contravention

of the provisions of the SARFAESI Act or rules made there under, he shall be punishable with imprisonment for a term, which may extend to one year or with a fine or both.

The Act has made various provisions where duties are cast on the borrower, the secured creditor, the securitization and the reconstruction company.

Cognizance of Offences

  • Section 30 provides that no court shall take cognizance of any offence punishable under section 27 in relation to non-compliance with the provisions of section 23, section 24 or section 25 or under section 28 or section 29 or any other provisions of the SARFAESI Act, except upon a complaint in writing made by an officer of the Central Registry or an officer of the Reserve Bank, generally or specially authorized in writing in this behalf.
  • Cognizance of the offence under the SARFAESI Act shall be taken by the Metropolitan Magistrate or the Judicial Magistrate of First Class only. No Court below the rank than this can take cognizance of such offences.

Power Of Adjudicating Authority To Impose Penalty/Appeals

  • Where any asset reconstruction company or any person fails to comply with any direction issued by the Reserve Bank under this Act the adjudicating authority may, by an order, impose on such company  or person in default, a penalty not exceeding one crore rupees or twice the amount involved in such  failure where such amount is quantifiable, whichever is more, and where such failure is a continuing  one, a further penalty which may extend to one lakh rupees for every day, after the first, during which such failure continues.
  • Any penalty imposed under this section shall be payable within a period of thirty days from the date of issue of notice under sub-section (2).
  • Where the asset reconstruction company fails to pay the penalty within the specified period under sub-section (3), the adjudicating authority shall, by an order, cancel its registration: Provided that an opportunity of being heard shall be given to such asset reconstruction company before cancellation of registration.
  • No complaint shall be filed against any person in default in any court pertaining to any failure under sub-section (1) in respect of which any penalty has been imposed and recovered by the Reserve Bank under this section.
  • Section 30B lays down the law for appealing against the decision of an adjudicating authority and states “A person in default, aggrieved by an order passed under sub-section (4) of section 30A, may, within a period of thirty days from the date on which such order is passed, prefer an appeal to the Appellate Authority: Provided that the Appellate Authority may entertain an appeal after the expiry of the said  period of thirty days, if it is satisfied that there was sufficient cause for not filing it within such period.”
  • Section 30C identifies and defines the power of the appellant authority.

Section 30D deals with’ recovery of penalties’ Any penalty imposed under section 30A shall be payable within a period of thirty days from the date on which notice demanding payment of the recoverable sum is served upon the person in default and, in  the case of failure of payment by such person within such period, the Reserve Bank may, for the purpose  of recovery-

  • Debit the current account, if any, of the person in default maintained with the Reserve Bank or by liquidating the securities, if any, held to the credit of such person in the books of the Reserve Bank
  • Issue a notice to the person from whom any amount is due to the person in default, requiring such person to deduct from the amount payable by him to the person in default, such amount equivalent to the amount of the recoverable sum, and to make payment of such amount to the Reserve Bank.

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CAIIB 4 Module C Unit 8 – Offences And Penalties ( Ambitious_Baba )

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