Recorded RBI impact
Fine: Rs 3.00 L
Monetary penalty · Fresh imposition
Published by RBI
23 Dec 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹3.00 lakh on The Chanasma Commercial Co-operative Bank Ltd., Chanasma, dist. Patan, Gujarat, by order dated December 16, 2024. RBI said the penalty was for non-compliance with directions on loans and advances to directors/related parties and on KYC, after inspection and subsequent proceedings found that the bank had sanctioned director-related loans and had not reviewed the risk categorization of certain accounts at least once every six months. The penalty was imposed 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 under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after supervisory inspection found non-compliance with directions on 'Loans and Advances to directors, their relatives and firms/concerns in which they are interested' and 'Know Your Customer (KYC)'. The sustained charges included sanctioning director-related loans and failing to carry out periodic review of risk categorization of certain accounts at least once in six months.
Operating Impact
The bank must absorb the monetary penalty but the release does not impose a new operating restriction. The supervisory finding may support further RBI action, but the immediate consequence is the fine only.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 3.00 L
- Order Date
- 16 Dec 2024
- Effective From
- 16 Dec 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank