Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
1 Aug 2024
Case Brief
RBI imposed a monetary penalty on Alibag Co-operative Urban Bank Limited, Alibag by order dated July 24, 2024. The action was taken after a statutory inspection (with reference to March 31, 2023) and a show-cause process. RBI concluded that the bank had not complied with certain directions on ‘Management of Advances-UCBs’, specifically sustaining the charge that it sanctioned gold loans beyond the prescribed regulatory limit under the bullet repayment scheme, and imposed the penalty under the BR Act provisions cited in the release.
Why RBI Acted
Following a statutory inspection with reference to the bank’s financial position as on March 31, 2023, RBI found supervisory non-compliance with directions on ‘Management of Advances-UCBs’. After a show-cause notice, the bank’s reply and oral submissions were considered, and the charge that it sanctioned gold loans beyond the prescribed regulatory limit under the bullet repayment scheme was sustained. RBI imposed the penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must absorb the monetary penalty and continue complying with RBI’s directions on advances, especially limits applicable to gold loans under bullet repayment schemes. The release notes the penalty is without prejudice to any other action RBI may take, so further supervisory or enforcement action remains possible.
Regulatory Basis
- section 47A(1)(c)
- sections 46(4)(i)
- section 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 24 Jul 2024
- Effective From
- 24 Jul 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank