Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
15 Jul 2021
Case Brief
The Reserve Bank of India penalized Sawantwadi Urban Cooperative Bank Limited, Sindhudurg by order dated July 15, 2021. RBI said the bank contravened/failed to comply with Supervisory Action Framework directions issued under Sections 35A and 36(1) read with Section 56 of the Banking Regulation Act, 1949, specifically by sanctioning fresh loans contrary to those instructions. After a show-cause process, RBI held the non-compliance substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act.
Why RBI Acted
RBI imposed a monetary penalty after an inspection found that Sawantwadi Urban Cooperative Bank Limited had not adhered to supervisory directions issued under Sections 35A and 36(1) read with Section 56 of the Banking Regulation Act, 1949. The specific non-compliance cited was sanctioning fresh loans in violation of the SAF instructions. After issuing a show-cause notice and considering the bank’s reply, RBI concluded that the charge was substantiated and warranted penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act.
Operating Impact
The bank must bear the ₹1 lakh penalty and the finding reinforces that it must continue complying with RBI’s SAF directions, especially restrictions on fresh lending. The order does not itself impose a new business restriction, but it signals continued supervisory scrutiny over the bank’s lending practices.
Regulatory Basis
- sections 35A and section 36(1) read with section 56 of the Banking Regulation Act, 1949
- Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 15 Jul 2021
- Effective From
- 15 Jul 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank