Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
19 Apr 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on Dwarakadas Mantri Nagari Sahakari Bank Ltd., Beed, Dist. Beed under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated its directives/instructions relating to loans and advances to directors, their relatives, and concerns in which they are interested. After a show cause notice, the bank's written reply and personal submissions were considered, but RBI found the violations substantiated and imposed the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after finding that the bank had violated directives/instructions on 'Loans/Advances to Directors/their relatives/concerns in which they are interested'. The bank submitted a written reply and personal submissions in response to the show cause notice, but RBI concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must bear the monetary penalty; the release does not indicate any additional operational restriction or license-related action. The matter is closed from the press release perspective, though the penalty signals RBI’s enforcement of lending-related governance norms.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank