Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
9 Jan 2023
Case Brief
RBI imposed a monetary penalty of ₹1.00 lakh on The Attur Town Co-operative Bank Ltd., Attur, Salem District, Tamil Nadu, by order dated January 02, 2023. The penalty was imposed because the bank sanctioned jewel loans to directors during 2018-2020 in violation of RBI directions issued in the matter of Board of Directors for UCBs. RBI cited deficiencies in regulatory compliance and acted under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Why RBI Acted
Based on the inspection report as on March 31, 2021, RBI found that the bank had sanctioned jewel loans to directors during 2018 to 2020, contrary to extant RBI instructions / directions issued in the matter of Board of Directors for UCBs. After a show-cause notice, the bank's reply and oral submissions were considered, and RBI concluded that the non-compliance was substantiated, warranting penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Operating Impact
The bank must absorb the monetary penalty; no operational restriction is described in this release. The finding records a compliance lapse around lending to directors, which may inform future supervisory scrutiny.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 2 Jan 2023
- Effective From
- 2 Jan 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank