Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
22 Jul 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty on Sardar Bhiladwala Pardi People’s Co-operative Bank Ltd., Killa Pardi, District Valsad (Scheduled UCB), Gujarat. The penalty was levied under Section 47A(1) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) for violation of RBI guidelines relating to loans beyond the ceiling of ₹1 lakh to nominal members. RBI had issued a show-cause notice based on an inspection finding as on March 31, 2015. After considering the bank’s written reply and oral submissions, RBI concluded that the violations were substantiated and imposed a ₹5 lakh penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after inspection found the bank had extended loans beyond the permitted ceiling of ₹1 lakh to nominal members. The bank replied to the show-cause notice and made personal submissions, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the financial penalty and continue operating under existing regulatory requirements. The action does not mention any restriction on banking operations, but it underscores compliance expectations around lending limits for nominal members.
Regulatory Basis
- Section 47A (1) read with Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank