Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
19 Sept 2024
Case Brief
RBI, by order dated September 13, 2024, imposed a monetary penalty on Dr. Babasaheb Ambedkar Sahakari Bank Limited, Nashik, Maharashtra. The penalty was for non-compliance with RBI directions relating to loans and advances to directors, their relatives, and firms/concerns in which they are interested. Following a statutory inspection, a show-cause notice, and consideration of the bank's reply and oral submissions, RBI concluded that the charge of sanctioning loans to directors and their relatives was sustained and levied a penalty under sections 47A(1)(c), 46(4)(i), and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found supervisory non-compliance with its directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. After issuing a show-cause notice and considering the bank's reply and oral submissions, RBI sustained the charge that the bank had sanctioned loans to directors and their relatives, leading to penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty; the action does not by itself impose a further operational restriction on deposits, lending, or customer access. The release also states that the penalty is without prejudice to any other action RBI may initiate separately.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 13 Sept 2024
- Effective From
- 13 Sept 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank