Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
4 Jul 2022
Case Brief
RBI imposed a monetary penalty of ₹2.00 lakh on Nav Jeevan Co-operative Bank Ltd., Ulhasnagar for contravention of RBI directions on Exposure Norms and Statutory / Other Restrictions applicable to UCBs. RBI said an inspection report, based on the bank's financial position as on March 31, 2020, showed that the bank had sanctioned certain loans in breach of the ceiling on unsecured advances. After considering the bank's response, RBI held the charge substantiated and imposed the penalty under the Banking Regulation Act, 1949.
Why RBI Acted
Based on an inspection report for the bank's financial position as on March 31, 2020, RBI found that the bank had sanctioned certain loans in breach of the ceiling on unsecured advances, amounting to non-compliance with RBI's directions on Exposure Norms and Statutory / Other Restrictions - UCBs. After considering the bank's reply, oral submissions and additional submissions, RBI concluded the contravention was substantiated and imposed a penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the financial penalty and ensure future compliance with RBI's exposure and unsecured-advance limits. The action does not itself impose a continuing operational restriction, but it signals heightened supervisory scrutiny over the bank's lending practices.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 27 Jun 2022
- Effective From
- 27 Jun 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank