Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Mar 2017
Case Brief
The Reserve Bank of India imposed a monetary penalty on Harihareshwar Sahakari Bank Ltd., Wai, Dist: Satara under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was imposed because the bank violated Section 20 of the BR Act, 1949 (AACS) by granting loans against property owned by directors. RBI issued a show-cause notice, considered the bank's written and oral submissions, and concluded that the violations were substantiated.
Why RBI Acted
RBI 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) after finding that Harihareshwar Sahakari Bank Ltd., Wai, Dist: Satara had violated Section 20 of the BR Act, 1949 (AACS) by granting loans against property owned by directors. The bank had received a show-cause notice, submitted a written reply, and made oral submissions, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the ₹2 lakh penalty; the release does not indicate any operational restriction or licence action. The action is backward-looking but signals compliance scrutiny around related-party lending and governance practices.
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 20 of BR Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank