Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
3 Jul 2023
Case Brief
By an order dated June 30, 2023, RBI imposed a monetary penalty of ₹1.00 lakh on Ranuj Nagarik Sahakari Bank Ltd., Patan (Gujarat). The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after RBI’s inspection found that the bank had sanctioned a loan where a relative of one of its directors stood as surety/guarantor, in contravention of RBI directions on loans and advances to directors etc. RBI stated that the action was based on deficiencies in regulatory compliance and not intended to pronounce on the validity of any transaction or agreement.
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 inspection found that the bank had sanctioned a loan in which a relative of one of the bank’s directors acted as surety/guarantor. This was held to be a contravention of RBI’s directions on loans and advances to directors etc., specifically the clarification on directors as surety/guarantors.
Operating Impact
The bank must absorb the penalty and continue complying with RBI’s directions on loans and advances to directors and related surety/guarantor arrangements. No direct operational restriction is described, but the finding underscores ongoing compliance obligations for the bank’s lending and governance practices.
Regulatory Basis
- Section 47 A (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
- 30 Jun 2023
- Effective From
- 30 Jun 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank