RBI imposes monetary penalty on The Mahabaleshwar Urban Cooperative Bank Limited, Mahabaleshwar, Maharashtra
Case Brief
RBI imposed a monetary penalty on The Mahabaleshwar Urban Cooperative Bank Limited, Mahabaleshwar by order dated July 28, 2021. The bank was found to have contravened RBI directions on Board of Directors - UCBs by sanctioning a credit facility to the relative of an expert director. RBI said the action was based on regulatory compliance deficiencies and was taken under the Banking Regulation Act, 1949 after considering the bank's reply and oral submissions.
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949. The inspection (based on the bank's financial position as on March 31, 2019) found that the bank had sanctioned a credit facility to the relative of an expert director, contrary to RBI's directions on Board of Directors for urban co-operative banks. After a notice, the bank's reply and oral submissions were considered, RBI concluded the non-compliance was substantiated and warranted penalty.
Severity Assessment
The action is a monetary penalty of ₹1 lakh, which falls in the lowest monetary band and has no separate structural restriction.
The bank must bear the ₹1 lakh penalty; the press release does not announce any operational restriction, but it signals RBI's finding of non-compliance with board-related lending directions. No direct impact on depositors or customers beyond the penalty itself is stated.
Published as The Mahabaleshwar Urban Cooperative Bank Limited, Mahabaleshwar
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