Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
30 Oct 2015
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹2.00 lakh on Balasinor Nagarik Sahakari Bank Ltd., Balasinor, District Mahisagar, Gujarat, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was levied because the bank was found to have violated RBI operational instructions under Section 36(1) of the B R Act, exceeded the prescribed individual borrower exposure limit, sanctioned loans on bullet repayment basis against gold/silver ornaments beyond the prescribed ceiling, breached the prescribed Do’s and Don’ts for directors, and failed to comply with UCIC-related guidelines. RBI stated that it had issued a show-cause notice, reviewed the bank’s written reply and personal submissions, and concluded that the violations were substantiated.
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 the bank had violated operational instructions imposed under Section 36(1) of the B R Act, exceeded the prescribed individual borrower exposure limit, sanctioned loans on bullet repayment basis against gold/silver ornaments beyond the prescribed ceiling, failed to follow directors’ Do’s and Don’ts, and did not comply with UCIC-related guidelines. RBI considered the bank’s reply and personal submissions before concluding that the violations were substantiated and merited penalty.
Operating Impact
The bank must absorb the ₹2 lakh penalty; the press release does not indicate any additional restriction beyond the monetary sanction. The action signals regulatory non-compliance findings, but no direct operational cap, suspension, or withdrawal of business rights is described.
Regulatory Basis
- Section 47A (1)(b)
- Section 46(4)
- Section 36 (1) of the B R Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank