Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
19 Oct 2023
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on The Chhapi Nagarik Sahakari Bank Ltd., Banaskantha, Gujarat by order dated September 18, 2023. RBI said the bank failed to comply with its directions on loans and advances to directors, relatives, and firms/concerns in which they are interested. The breach arose from a statutory inspection that found the bank had sanctioned a loan to a relative of one of its directors. 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 under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after a statutory inspection found that the bank had sanctioned a loan to a relative of one of its directors, contrary to RBI directions on loans and advances to directors, relatives, and firms/concerns in which they are interested.
Operating Impact
The bank must absorb the monetary penalty; no separate operational restriction is described in the release. The action signals regulatory non-compliance on related-party lending and may affect RBI scrutiny, but it does not itself impose a business curtailment on customers or counterparties.
Regulatory Basis
- Section 47 A (1) (c) read with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 18 Sept 2023
- Effective From
- 18 Sept 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank