Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Mar 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Janata Co-operative Bank Limited, Malegaon, Nashik, Maharashtra, following supervisory findings from a statutory inspection with reference to the bank’s financial position as on March 31, 2022. RBI said the bank failed to comply with its directions on Management of Advances-UCBs and Exposure Norms and Statutory/Other Restrictions-UCBs. The sustained violations were that the bank sanctioned gold loans beyond the prescribed regulatory limit under the bullet repayment scheme and sanctioned loans to nominal members beyond the prescribed limit. The penalty was imposed under the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found that the bank had not complied with RBI directions on Management of Advances-UCBs and Exposure Norms and Statutory/Other Restrictions-UCBs. The sustained charges were that the bank sanctioned gold loans beyond the prescribed regulatory limit under the bullet repayment scheme and also sanctioned loans to its nominal members beyond the prescribed limit. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) and section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and remain mindful of RBI’s lending exposure limits going forward. No operational restriction was imposed in this release, but RBI noted that further action could still be initiated separately.
Regulatory Basis
- section 47 A (1) (c) read with section 46 (4) (i) and section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 27 Feb 2024
- Effective From
- 27 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank