Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
28 Oct 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Devi Gayatri Co-operative Urban Bank Ltd., Hyderabad, Telangana, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The bank was found to have violated RBI directives and guidelines on loans and advances to directors and their relatives. RBI had issued a show-cause notice, considered the bank’s written reply, and concluded that the violations were substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), after concluding that the bank had violated Reserve Bank of India directives and guidelines relating to loans and advances made to directors and their relatives. A show-cause notice was issued, the bank submitted a written reply, and RBI found the violations substantiated.
Operating Impact
The bank must absorb the monetary penalty of Rs 1 lakh; the release does not indicate any additional operational restriction. The action is adverse only to the extent of the financial penalty and does not state further restrictions on customers or business activities.
Regulatory Basis
- Section 47A (1) (b) read with Section 46 (4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank