Recorded RBI impact
Fine: Rs 2.08 L
Monetary penalty · Fresh imposition
Published by RBI
1 Aug 2024
Case Brief
By order dated July 26, 2024, RBI imposed a penalty on Shrikrishna Co-operative Bank Limited, Umrer, Maharashtra for non-compliance with directions governing loans and advances to directors, their relatives, and firms/concerns in which they are interested. The statutory inspection, conducted with reference to the bank's financial position as on March 31, 2023, found that director-related loans (fund and non-fund based) had been sanctioned to companies/concerns where the directors or their relatives had an interest. RBI invoked section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection found non-compliance with its directions on 'Loans and advances to directors, their relatives, and firms/concerns in which they are interested'. The charge sustained was sanctioning director-related loans (fund and non-fund based) to companies/concerns where directors or their relatives were interested, in violation of RBI directions under the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and remain compliant with RBI's lending restrictions on related-party exposures. The order does not invalidate customer transactions, but it signals supervisory concern and leaves RBI free to initiate further action if warranted.
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 2.08 L
- Order Date
- 26 Jul 2024
- Effective From
- 26 Jul 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank