Recorded RBI impact
Fine: Rs 25,000
Monetary penalty · Fresh imposition
Published by RBI
26 Mar 2024
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 25,000 on The Dindigul Urban Co-operative Bank Ltd., Dindigul, Tamil Nadu, by order dated February 28, 2024. The penalty was imposed after a statutory inspection and supervisory review found non-compliance with RBI directions on 'Exposure Norms and Statutory/ Other Restrictions – UCBs'. RBI noted that the charge of sanctioning loans to nominal members in excess of the prescribed ceiling was sustained after considering the bank's reply and oral submissions. 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 after a statutory inspection and supervisory findings indicated non-compliance with RBI directions on 'Exposure Norms and Statutory/ Other Restrictions – UCBs'. The bank was issued a show-cause notice, and after considering its reply and oral submissions, RBI found that the charge of sanction of loans to nominal members in excess of the prescribed ceiling was sustained. 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 penalty, but the release does not impose any new operational restriction on its business. The action serves as a supervisory compliance record and leaves open the possibility of further RBI action, if any, on the same or related issues.
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 25,000
- Order Date
- 28 Feb 2024
- Effective From
- 28 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank