Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
29 Apr 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on Manipal Co-operative Bank Ltd., Manipal, Karnataka under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI found that the bank violated its directives/instructions by granting loans for real estate purposes beyond the single-party exposure limit of 15% of capital funds and beyond the real estate exposure limit of 15% of deposits. RBI issued a show-cause notice, considered the bank's written reply and personal submissions, and concluded that the violations were substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after finding that the bank had violated RBI directives/instructions by granting loans for real estate purposes exceeding the single-party exposure limit of 15% of capital funds and the real estate exposure limit of 15% of deposits.
Operating Impact
The bank must absorb the monetary penalty; the release does not describe any operational restriction. The finding underscores continued compliance obligations around exposure limits for real estate lending.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank