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Ernakulam District Co-operative Bank Limited

Co-operative bankErnakulam, Kerala

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 5.00 L

Monetary penalty · Fresh imposition

S2

Published by RBI

1 Aug 2012

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on Ernakulam District Co-operative Bank Limited, Ernakulam (Kerala), under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated Section 29(1)(b) by granting unsecured loans to M/s Mithra Agricultural Produce Committee (MAPC), and also violated Section 6(1)(i) and Section 29(1)(b) in the case of Rural Academy of Management Studies (RAMS), along with other violations cited in the show-cause notice. After issuing a show-cause notice and reviewing the bank's written reply, RBI concluded that the violations were substantiated and imposed the penalty.

Why RBI Acted

Lending normsOther

The Reserve Bank of India 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). The bank was found to have violated Section 29(1)(b) by granting unsecured loans to M/s Mithra Agricultural Produce Committee (MAPC), and violated Section 6(1)(i) and Section 29(1)(b) in the case of Rural Academy of Management Studies (RAMS), along with other violations mentioned in the show-cause notice. RBI issued a show-cause notice, considered the bank's written reply, and concluded the violations were substantiated and warranted penalty.

Operating Impact

The bank must absorb the monetary penalty; the release does not describe any operational restriction or licence impact. The action is backward-looking, but it signals RBI concern over lending compliance and related statutory breaches.

Regulatory Basis

  • Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
  • Section 29(1)(b) of the Act ibid
  • Section 6(1)(i) and Section 29(1)(b) of the Act ibid

Action Facts

Primary Impact
Fine: Rs 5.00 L
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank