Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty on The Rajapalayam Co-operative Urban Bank Ltd., Rajapalayam, Tamil Nadu, by order dated February 28, 2024. The penalty was levied for non-compliance with RBI directions relating to board governance for UCBs, loans and advances to directors and their relatives, and exposure norms/statutory restrictions for UCBs. RBI's inspection found that the bank had extended loans to relatives of directors and sanctioned loans to nominal members beyond the prescribed ceiling.