Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
13 Jun 2024
Case Brief
RBI, by order dated May 28, 2024, imposed a monetary penalty of Rs 1.00 lakh on Gujarat Ambuja Co-operative Bank Ltd., Ahmedabad, Gujarat. The penalty followed a statutory inspection with reference to the bank's financial position as on March 31, 2023, and related supervisory findings that the bank had not complied with RBI directions on loans and advances to directors, relatives, and firms/concerns in which they are interested, including clarification on directors acting as sureties/guarantors. RBI stated that the sustained charge was sanctioning loans where relatives of directors stood as guarantors. The action was taken under section 47A(1)(c) read with sections 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 deficiencies and non-compliance with directions on 'Loans and Advances to directors, relatives and firms/concerns in which they are Interested' read with 'Loans and Advances to directors etc. - directors as surety/guarantors – Clarification'. RBI noted that the charge of sanctioning loans wherein relatives of the bank's directors stood as guarantors was sustained after examination of the bank's reply and oral submissions. The penalty was imposed 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 and address the compliance lapses identified by RBI. The order does not by itself restrict banking operations or alter customer transactions, but RBI may initiate further action separately if warranted.
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 1.00 L
- Order Date
- 28 May 2024
- Effective From
- 28 May 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank