Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
17 Feb 2017
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on Janata Urban Co-operative Bank Ltd., Wai, District Satara under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found that during FY 2013-14 the bank’s credit exposure towards housing/real estate/commercial real estate was 18.8% of the preceding year’s net total assets, breaching the 15% limit prescribed by an RBI circular dated July 01, 2013. After issuing a show-cause notice and reviewing the bank’s written reply and further submissions, RBI concluded the violation was substantiated and imposed the penalty.
Why RBI Acted
During FY 2013-14, Janata Urban Co-operative Bank Ltd., Wai, District Satara had credit exposure towards housing/real estate/commercial real estate at 18.8% of the preceding year’s net total assets, exceeding the 15% limit prescribed under RBI circular dated July 01, 2013. RBI issued a show-cause notice, considered the bank’s reply and further submissions, and concluded that the violation was substantiated. The penalty was imposed under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies).
Operating Impact
The bank must absorb the monetary penalty and continue complying with RBI’s exposure norms, particularly limits on lending to housing, real estate and commercial real estate sectors. The action has no stated operational restriction beyond the fine, but signals regulatory scrutiny of the bank’s capital/exposure compliance practices.
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 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank