Recorded RBI impact
Fine: Rs 75,000
Monetary penalty · Fresh imposition
Published by RBI
29 Apr 2024
Case Brief
RBI, by order dated April 10, 2024, imposed a monetary penalty of Rs 75,000 on Indira Mahila Sahakari Bank Limited, Malegaon, Maharashtra. The bank was found to have sanctioned loans to nominal members in excess of the prescribed ceiling, breaching RBI directions on 'Policy and Practice regarding Nominal Membership' and 'Exposure Norms & Statutory/ Other Restrictions - UCBs'. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection and consideration of the bank's reply and oral submissions.
Why RBI Acted
Following a statutory inspection with reference to its financial position as on March 31, 2023, RBI issued a show-cause notice based on supervisory findings of non-compliance with RBI directions on 'Policy and Practice regarding Nominal Membership' and 'Exposure Norms & Statutory/ Other Restrictions - UCBs'. After considering the bank's reply and oral submissions, RBI sustained the charge that the bank had sanctioned loans to nominal members beyond the prescribed ceiling, and imposed a monetary penalty 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 penalty and address the compliance lapse identified by RBI. The order does not itself impose an operational restriction on customers, but it signals supervisory scrutiny and potential for further regulatory action if non-compliance persists.
Regulatory Basis
- section 47 A (1) (c) read with sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 75,000
- Order Date
- 10 Apr 2024
- Effective From
- 10 Apr 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank