Recorded RBI impact
Fine: Rs 75,000
Monetary penalty · Fresh imposition
Published by RBI
30 Nov 2018
Case Brief
The Reserve Bank of India imposed a monetary penalty on Peoples Co-operative Bank Ltd., Deulgaonraja, Buldhana under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found that the bank had violated Section 20 of the Act by granting a loan or advance to its directors, and had also misreported through the XBRL reporting system. After a show-cause notice and the bank's written reply, RBI concluded the contraventions were established and warranted penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was found to have violated Section 20 of the Act, which prohibits banks from granting any loan or advance to their directors, and also to have misreported under the XBRL reporting system. RBI issued a show-cause notice, considered the bank's written reply, and concluded the violations were substantiated.
Operating Impact
The bank must absorb the monetary penalty and avoid any similar violations going forward, particularly lending to directors and inaccuracies in regulatory reporting. The action does not impose a business restriction, but it signals supervisory censure and may increase scrutiny of the bank's compliance controls.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
- Section 20 of the Banking Regulation Act,1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 75,000
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank