RBI imposes monetary penalty on The District Co-operative Central Bank Ltd., Warangal, Telangana
Case Brief
RBI imposed a monetary penalty on The District Co-operative Central Bank Ltd., Warangal, Telangana, after a statutory inspection by NABARD found that the bank had sanctioned director-related loans, contrary to Section 20 read with Section 56 of the Banking Regulation Act, 1949. After a show-cause process and hearing, RBI concluded that the charge was sustained and levied the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
RBI imposed a monetary penalty after a statutory inspection by NABARD found that the bank had sanctioned loans related to its directors, which was treated as a contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and then sustained the charge under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Severity Assessment
The action is a monetary penalty of ₹1 lakh, which falls within the lowest monetary band and there is no broader operational restriction.
The bank must bear the ₹1 lakh penalty, and the finding signals supervisory concern over related-party lending compliance. The release does not describe any immediate operational restriction, but RBI has indicated the action is without prejudice to any further proceedings it may initiate.
Published as The District Co-operative Central Bank Ltd., Warangal, Telangana
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