Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Jun 2018
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1,00,000 on Abhyudaya Mahila Urban Co-operative Bank Ltd., Channapatna, Karnataka under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was levied because the bank violated RBI directives in para 3 of the circular on loans and advances to directors, relatives, and firms/concerns in which they are interested. RBI issued a show-cause notice, considered the bank's representation and personal hearing request, and concluded that the violations were substantiated.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after concluding that the bank violated para 3 of RBI Circular No. BPD Cir.50/13.05.00/2002-03 dated April 29, 2003 on loans and advances to directors, relatives, and related firms/concerns. The bank had received a show-cause notice, sought personal hearing, and RBI found the violations substantiated and deserving of penalty.
Operating Impact
The bank must absorb the penalty and the enforcement finding on related-party lending violations. No additional operational restriction is described in this release, but the action signals continued compliance scrutiny over loans and advances to directors, relatives, and connected firms/concerns.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
- para 3 of Reserve Bank of India Circular No. BPD Cir.50/13.05.00/2002-03 dated April 29, 2003
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 29 Apr 2003
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank