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Mizoram Urban Cooperative Development Bank Limited, Aizawl

Co-operative bankAizawl, Mizoram

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 20,000

Monetary penalty · Fresh imposition

S1

Published by RBI

7 Aug 2023

Case Brief

The Reserve Bank of India imposed a monetary penalty on Mizoram Urban Cooperative Development Bank Limited, Aizawl by order dated August 02, 2023. RBI said the penalty was for non-compliance with specific directions issued under the Supervisory Action Framework and certain provisions of the RBI (Know Your Customer) Directions, 2016. The inspection found that the bank had granted fresh loans and advances carrying risk weights of more than 100% in violation of SAF directions and had not put in place a system for periodic review of risk categorisation of accounts. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

Why RBI Acted

Capital & exposure normsReporting & disclosureGovernance oversight

RBI's statutory inspection for the bank's financial position as on March 31, 2022 found that it had granted fresh loans and advances carrying risk weights of more than 100% in violation of specific directions issued under SAF, and had failed to put in place a system for periodic review of risk categorisation of accounts. After a show-cause notice, RBI held the charge of non-compliance substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

Operating Impact

The bank must absorb the monetary penalty and address the compliance gaps identified by RBI, including controls over fresh lending subject to SAF directions and periodic review of account risk categorisation. The action does not describe a suspension or operating ban, but it signals ongoing supervisory scrutiny and the need for corrective compliance measures.

Regulatory Basis

  • Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
  • Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016

Action Facts

Primary Impact
Fine: Rs 20,000
Order Date
2 Aug 2023
Effective From
2 Aug 2023
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank