Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
13 Apr 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on The Ankola Urban Co-operative Bank Limited, Ankola, Dist. Uttara Kannada, Karnataka under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated Section 36(1)(a) of the Act by sanctioning unsecured advances in breach of operational instructions issued to it. After a show-cause process and consideration of the bank's written reply and personal submissions, RBI held that the violations were substantiated and imposed the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after finding that The Ankola Urban Co-operative Bank Limited had violated Section 36(1)(a) of the Act by sanctioning unsecured advances contrary to the operational instructions issued to the bank. The bank had submitted a written reply to the show-cause notice and also made personal submissions, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not mention any further operational restriction or license action. The forward-looking impact is limited to the financial penalty and the compliance signal regarding unsecured lending practices.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
- Section 36(1)(a) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank