Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
11 Dec 2007
Case Brief
The Reserve Bank of India has imposed a monetary penalty of Rs.1.00 lakh on Shri Parola Urban Co-operative Bank Ltd., Jalgaon, Maharashtra. RBI said the bank violated its directive on credit exposure limits for individual/group borrowers and on loans and advances to directors and their relatives. After issuing a show-cause notice and considering the bank’s reply, RBI concluded that the violation was substantiated and imposed the penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies).
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was found to have violated RBI’s directive on credit exposure limits for individual/group borrowers and on loans and advances to directors and their relatives. RBI issued a show-cause notice, considered the bank’s written reply, and concluded that the violation was substantiated and warranted penalty.
Operating Impact
The bank must absorb the penalty and remain compliant with RBI’s credit exposure and related-party lending norms going forward. The action does not indicate a restriction on operations, but it signals supervisory censure and heightened compliance expectations.
Regulatory Basis
- Section 47A(1)(b)
- Section 46(4) of the Banking Regulation Act, 1949 (As applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank