Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
15 May 2025
Case Brief
By an order dated May 09, 2025, RBI imposed a monetary penalty of ₹1.00 lakh on Mangalore Co-operative Town Bank Ltd., Mangalore, Karnataka. The penalty was imposed after RBI’s statutory inspection and subsequent supervisory review found non-compliance with directions relating to loans and advances to directors, their relatives, and firms/concerns in which they are interested. RBI stated that the sustained charge was that the bank had sanctioned director-related loans. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after a statutory inspection and supervisory findings showed non-compliance with RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. The sustained charge was that the bank had sanctioned director-related loans.
Operating Impact
The bank must absorb the monetary penalty and ensure compliance with RBI’s directions on related-party lending going forward. The order does not itself impose a business restriction, but it signals supervisory concern and may be followed by further regulatory action if lapses continue. Depositors and other stakeholders are not directly restricted by this order.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 9 May 2025
- Effective From
- 9 May 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank