Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
7 Nov 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on Shree Mahabaleshwar Co-operative Bank Ltd., Karnataka, by order dated October 29, 2024. The penalty was issued after RBI found non-compliance with its directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. RBI stated that the bank had sanctioned multiple loans to relatives of directors, and the penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after supervisory findings showed non-compliance with its directions on loans and advances to directors, their relatives, and connected firms/concerns. The sustained charge was that the bank had sanctioned multiple loans to relatives of directors.
Operating Impact
The bank must absorb the monetary penalty and remain mindful of continued regulatory scrutiny. RBI noted that the penalty is without prejudice to any other action that may be initiated, so further supervisory or enforcement action remains possible.
Regulatory Basis
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Order Date
- 29 Oct 2024
- Effective From
- 29 Oct 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank