Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Oct 2024
Case Brief
RBI, by order dated October 10, 2024, imposed a monetary penalty of Rs 1.00 lakh on Nazareth Urban Co-operative Bank Ltd., Tamil Nadu. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following a statutory inspection and subsequent show-cause proceedings. RBI found that the bank had sanctioned loans to a relative of a director, in breach of its directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested.
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 its statutory inspection found non-compliance with RBI directions. The sustained charge was that the bank had sanctioned loans to a relative of a director, violating directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested.
Operating Impact
The bank must absorb the monetary penalty; the release does not state any additional operational restriction or deadline. The finding signals regulatory non-compliance and leaves open the possibility of further RBI action, but this order itself only imposes the fine.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 10 Oct 2024
- Effective From
- 10 Oct 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank