Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
6 May 2025
Case Brief
By an order dated April 25, 2025, RBI imposed a monetary penalty of ₹2.00 lakh on The Deccan Merchants Co-operative Bank Ltd., Mumbai. The penalty was for non-compliance with RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. RBI said that, based on the statutory inspection and subsequent proceedings, the sustained charge was that the bank had sanctioned director-related loans. 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 after its statutory inspection found that The Deccan Merchants Co-operative Bank Ltd., Mumbai had failed to comply with RBI directions relating to loans and advances to directors, their relatives, and firms/concerns in which they are interested. The sustained charge was that the bank had sanctioned director-related loans. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must bear the ₹2 lakh penalty, and the order serves as a regulatory censure for violating RBI’s lending-related directions. The release does not describe any fresh operational restriction, but RBI notes the penalty is without prejudice to any other action that may be initiated against the bank.
Regulatory Basis
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 25 Apr 2025
- Effective From
- 25 Apr 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank