Case Brief
What Happened
RBI imposed a monetary penalty of ₹1 lakh on Nirmal Urban Co-operative Bank Ltd., Nagpur, Maharashtra under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The penalty followed a statutory inspection and a show-cause process in which RBI found that the bank had not complied with directions on limits on exposure to single and group borrowers/parties, large exposures, revision in the target for priority sector lending for UCBs, and operational instructions under the Supervisory Action Framework. RBI specifically noted that the bank had not reduced the single-borrower exposure limit for fresh loans and advances by 50% of the applicable regulatory limit in certain cases and had offered deposit interest rates higher than those offered by State Bank of India. RBI stated that the penalty was based on regulatory non-compliance and did not pronounce on the validity of the bank’s transactions with customers.