Recorded RBI impact
Fine: Rs 25,000
Monetary penalty · Fresh imposition
Published by RBI
11 Nov 2021
Case Brief
RBI imposed a monetary penalty on The Deola Merchants’ Co-operative Bank Ltd., Nashik, Maharashtra, by an order dated November 11, 2021. The bank was found to have granted a CC loan to a relative of one of its directors, violating RBI directions issued to Urban Co-operative Banks on Board of Directors and Exposure Norms. RBI said the action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after considering the bank’s reply and oral submissions.
Why RBI Acted
Based on an inspection report as of March 31, 2019, RBI found that the bank had granted a CC loan to a relative of one of its directors, in contravention of / non-compliance with RBI directions issued to Urban Co-operative Banks on Board of Directors and Exposure Norms. After a show-cause notice, the bank's reply and oral submissions were considered, and RBI concluded the charge was substantiated and warranted a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the ₹25,000 penalty, but the release does not impose any ongoing business restriction or withdrawal of permissions. The forward-looking consequence is primarily compliance signaling: the bank is expected to adhere to RBI’s governance and exposure norms going forward.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 25,000
- Order Date
- 11 Nov 2021
- Effective From
- 11 Nov 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank