Arjun Urban Co-operative Bank Ltd., Solapur, Maharashtra

RBI placed The Arjun Urban Co-operative Bank Ltd., Solapur, under Section 35A restrictions effective August 7, 2012. The bank’s lending, investment, liability-taking, deposit acceptance, and payment activities were curtailed, with only limited withdrawals allowed.

The bank must operate under strict RBI-imposed limits from August 7, 2012 onward, with no fresh lending, limited deposit acceptance, restricted payments, and capped withdrawals for depositors. Customers’ access to funds is constrained to the permitted withdrawal amount, and any further relaxation depends on RBI’s subsequent modification of the directions.

• Section 35A of the Banking Regulation Act, 1949
• Section 56 of the Banking Regulation Act, 1949

RBI imposed a monetary penalty of Rs 1 lakh on Arjun Urban Co-operative Bank Ltd., Solapur. The penalty was for breaches of RBI directives on exposure limits, unsecured loans, and director-related loans.

The bank must absorb the monetary penalty; no additional operational restriction is stated in the release. The action is backward-looking, but it signals regulatory non-compliance on exposure, unsecured lending, and related-party lending practices.

• Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)