Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹1 lakh on The Batlagundu Co-operative Urban Bank Limited, Tamil Nadu, following a statutory inspection with reference to its financial position as on March 31, 2024. RBI said the bank failed to comply with certain directions on Prudential Norms on Capital Adequacy for Primary (Urban) Co-operative Banks and specific directions under the Supervisory Action Framework (SAF). The sustained charges included sanctioning loans without complying with the share-linking-to-borrowings norm despite CRAR being below the regulatory minimum, and sanctioning fresh loans and advances with risk-weight above 100% while also breaching the single borrower exposure limit in certain instances. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.