Recorded RBI impact
Fine: Rs 1.50 L
Monetary penalty · Fresh imposition
Published by RBI
11 Apr 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.50 lakh on Andarsul Urban Co-operative Bank Ltd., Andarsul (Maharashtra), by order dated April 06, 2022. RBI said the bank had contravened its directions on Board of Directors and Exposure Norms & Statutory/Other Restrictions for urban co-operative banks by granting loans to relatives of directors. After a show-cause notice, the bank's replies and oral submissions were considered, and RBI held the non-compliance substantiated. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Why RBI Acted
Based on an inspection with reference to its financial position as on March 31, 2019, RBI found that Andarsul Urban Co-operative Bank Ltd. had granted loans to relatives of directors, contrary to/non-compliant with RBI directions on Board of Directors and Exposure Norms & Statutory/Other Restrictions for UCBs. After considering the bank's replies and oral submissions, RBI concluded that the charge of non-compliance was substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and address the compliance lapses identified by RBI, particularly around director-related lending and adherence to exposure norms. The order does not state any operational restriction on depositors or customers beyond the penalty itself.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.50 L
- Order Date
- 6 Apr 2022
- Effective From
- 6 Apr 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank