Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
17 Mar 2025
Case Brief
By an order dated March 12, 2025, RBI imposed a monetary penalty of ₹1.00 lakh on The Gurdaspur Central Co-operative Bank Ltd., Gurdaspur, Punjab. The penalty was imposed after a statutory inspection by NABARD, supervisory findings, a show-cause notice, and consideration of the bank’s reply and oral submissions. RBI sustained the charge that the bank had sanctioned/renewed a director-related loan in contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949, and acted under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after a statutory inspection by NABARD. The bank was found to have sanctioned/renewed a director-related loan in contravention of Section 20 of the BR Act. The penalty followed a show-cause notice, the bank’s reply, and oral submissions at a personal hearing.
Operating Impact
The bank must absorb the monetary penalty and ensure future lending decisions comply with restrictions on director-related lending under the Banking Regulation Act. The order does not by itself invalidate existing transactions, but RBI notes it may initiate further action if warranted.
Regulatory Basis
- Section 20 read with Section 56 of the Banking Regulation Act, 1949
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 12 Mar 2025
- Effective From
- 12 Mar 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank