Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
8 Jun 2026
Case Brief
By an order dated June 4, 2026, RBI imposed a monetary penalty of Rs 50,000 on The Amravati Merchants Sahakari Bank Ltd., Amravati, Maharashtra. The penalty was levied after statutory inspection and supervisory review found non-compliance with RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. RBI issued a show-cause notice, considered the bank's written and oral submissions, and concluded that the charge relating to sanction of certain director-related loans was sustained. The action was taken 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 monetary penalty after supervisory inspection found the bank had failed to comply with RBI directions concerning loans and advances to directors, their relatives, and firms/concerns in which they are interested. A show-cause notice was issued, and after considering the bank's reply, additional submissions, and oral submissions at a personal hearing, RBI sustained the charge that the bank had sanctioned certain director-related loans. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty and address the compliance weakness identified by RBI. The release does not impose a new operational restriction, but it signals supervisory concern over related-party lending controls and may increase scrutiny of future lending practices involving directors and connected interests.
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 50,000
- Order Date
- 4 Jun 2026
- Effective From
- 4 Jun 2026
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank