Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
22 Dec 2011
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on The Gondal Nagrik Sahakari Bank Ltd., Gondal under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI found that the bank had granted loans to directors, incorrectly reported loans to directors in statutory returns on advances to directors, and failed to submit Cash Transaction Reports (CTRs) to FIU-IND. After considering the bank’s reply and personal submissions, RBI held that the contraventions were established and merited the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) after finding that the bank had granted loans to its directors, not correctly reported those loans to RBI in the statutory returns on advances to directors, and not submitted CTRs to FIU-IND, New Delhi. RBI considered the bank's written reply and personal submissions but concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must bear the monetary penalty and address the compliance lapses identified by RBI, particularly around related-party lending, regulatory reporting, and transaction reporting to FIU-IND. The action does not describe a withdrawal or operational restriction, but it signals heightened compliance expectations going forward.
Regulatory Basis
- Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank