Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
4 Jan 2019
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Harihareshwar Sahakari Bank Ltd., Wai, Satara, Maharashtra 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 its instructions/guidelines relating to director-related loans. After issuing a show-cause notice and considering the bank’s reply and further submissions, RBI concluded that the violations were substantiated and warranted imposition of penalty.
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 the bank had violated RBI instructions/guidelines relating to director-related loans. The bank had replied to a show-cause notice, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not state any additional operational restriction or deadline. The action is retrospective, but it signals RBI’s supervisory finding on lending to directors and related governance controls.
Regulatory Basis
- Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank