Bhadradri Co-operative Urban Bank Ltd

RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS) after an inspection found non-compliance with directions on 'Exposure Norms and Statutory / Other Restrictions-UCBs' and 'Management of Advances – UCBs'. The inspection report for the bank’s financial position as on March 31, 2020 noted instances of sanction of loans and making of investments in breach of exposure norms applicable, and grant of gold loans in excess of the permissible limit under the bullet repayment scheme. After show-cause proceedings, reply, and oral submissions, RBI concluded the charges were substantiated and warranted penalty.

The bank must absorb the penalty and address the compliance weaknesses identified by RBI, especially around exposure limits and advances management. The action does not itself impose a business restriction, but it signals heightened supervisory scrutiny and the need for tighter lending and investment controls going forward.