Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
12 Oct 2017
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹0.50 lakh on The Anantapur Co-operative Town Bank Ltd., Anantapuramu, Andhra Pradesh under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The violation related to RBI directives and guidelines on loans and advances to directors and their relatives. RBI issued a show-cause notice, considered the bank’s written reply and personal hearing, and concluded that the violations were substantiated.
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 directives and guidelines relating to loans and advances to directors and their relatives, after considering its reply to the show-cause notice and personal hearing.
Operating Impact
The bank must absorb the penalty and the finding of non-compliance. The action does not describe a suspension or operational restriction, but it signals RBI scrutiny of the bank’s lending governance practices, particularly with respect to related-party loans.
Regulatory Basis
- Section 47A (1) (b) read with Section 46 (4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank