Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
21 Sept 2021
Case Brief
The Reserve Bank of India imposed a monetary penalty on Porbandar Commercial Co-operative Bank Ltd., Porbandar (Gujarat) by order dated September 21, 2021. The penalty was imposed because the bank contravened RBI directions on loans and advances to directors, relatives, and firms/concerns in which they are interested. RBI said the violation was identified through statutory inspection and related correspondence, and the penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after statutory inspection and examination of correspondence found non-compliance with directions on 'Loans and advances to directors, relatives and firms/concerns in which they are interested'. The bank was issued a show-cause notice, and after considering its reply and oral submissions, RBI concluded the contravention was substantiated and warranted 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 bear the monetary penalty, but RBI clarified that the action does not pronounce on the validity of any transaction or agreement with customers. No operational restriction is described in this release, so the impact is limited to the penalty and regulatory censure.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 21 Sept 2021
- Effective From
- 21 Sept 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank