Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
22 Feb 2024
Case Brief
By an order dated February 13, 2024, RBI imposed a monetary penalty of ₹50,000 on Janseva Co-operative Bank Limited, Nashik, Maharashtra. The penalty was levied for non-compliance with RBI directions on 'Loans and Advances to directors, relatives and firms/concerns in which they are Interested' read with 'Loans and Advances to Directors etc. - Directors as surety/guarantors – Clarification'. RBI's inspection for the bank's financial position as on March 31, 2022, found that it had sanctioned a director-related loan and another loan where a relative of a director acted as guarantor. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. RBI noted that the action was based on deficiencies in regulatory compliance and was not intended to pronounce on the validity of any transaction or agreement.
Why RBI Acted
RBI found, on inspection of the bank's financial position as on March 31, 2022, that the bank had sanctioned a director-related loan and also sanctioned a loan where a relative of a director stood as guarantor. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for non-compliance with RBI directions on loans and advances to directors and related parties.
Operating Impact
The bank must absorb the monetary penalty; no additional operational restriction is described in the release. The finding underscores continued compliance obligations around lending to directors, related parties, and guarantor arrangements, but the release does not impose any new deadline or business curtailment.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Order Date
- 13 Feb 2024
- Effective From
- 13 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank