Case Brief
What Happened
RBI, by order dated November 05, 2024, imposed a penalty of Rs 1,50,000 on The Srirangam Co-operative Urban Bank Ltd., Tamil Nadu. The action followed a statutory inspection referencing the bank's financial position as on March 31, 2023, which found non-compliance with RBI directions on loans and advances to directors, their relatives, and associated firms/concerns, as well as with specific directions issued under the Supervisory Action Framework. RBI noted that the bank sanctioned loans to relatives of directors and extended credit facilities to sectors with a high proportion of non-performing assets and fresh loans/advances carrying risk weights of more than 100%, contrary to the cited supervisory directions. The penalty was imposed under the Banking Regulation Act, 1949.