Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Mar 2014
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on Almora Urban Cooperative Bank Ltd., Almora, Uttarakhand, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its directive/guideline on loans and advances to directors, their relatives, and concerns in which they are interested. After considering the bank’s reply to a show-cause notice, RBI concluded that the violation was substantiated and that penalty was warranted.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after finding that Almora Urban Cooperative Bank Ltd. violated RBI directions/guidelines regarding loans and advances to directors, their relatives, and concerns in which they are interested. The bank had responded to a show-cause notice, but RBI concluded the violation was substantiated and warranted penalty.
Operating Impact
The bank must absorb the penalty and remain compliant with RBI norms on related-party lending and governance controls. The action does not describe a shutdown or operating restriction, but it signals regulatory scrutiny over lending to directors and connected interests.
Regulatory Basis
- Section 47 A (1) (b) read with Section 46 (4) of the Banking Regulation Act, 1949 ( As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank