Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
25 Apr 2024
Case Brief
RBI, by order dated April 4, 2024, imposed a monetary penalty of ₹1.00 lakh on Dr. Jaiprakash Mundada Urban Co-operative Bank Limited, Hingoli, Maharashtra. The bank was found to have breached RBI Directions on ‘Management of Advances-UCBs’ and ‘Exposure Norms & Statutory/ Other Restrictions - UCBs’ by sanctioning gold loans beyond the prescribed ceiling under the bullet repayment scheme and by extending loans beyond the prescribed ceiling to nominal members. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank’s reply and oral submissions.
Why RBI Acted
RBI imposed a monetary penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after supervisory findings showed non-compliance with RBI Directions on ‘Management of Advances-UCBs’ and ‘Exposure Norms & Statutory/ Other Restrictions - UCBs’. The sustained charges were that the bank sanctioned gold loans beyond the prescribed ceiling under the bullet repayment scheme and extended loans beyond the prescribed ceiling to nominal members.
Operating Impact
The bank must bear the ₹1 lakh penalty, and the order may not preclude RBI from initiating any further action for the same or related non-compliance. No immediate operational restriction is stated in this release, but the underlying compliance lapses remain relevant for supervisory scrutiny.
Regulatory Basis
- section 47 A (1) (c) read with sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 4 Apr 2024
- Effective From
- 4 Apr 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank