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The Halol Urban Co-operative Bank Ltd., Panchmahal, Gujarat

Co-operative bankPanchmahal, Gujarat

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 2.00 L

Monetary penalty · Fresh imposition

S2

Published by RBI

8 Jan 2024

Case Brief

By an order dated December 14, 2023, RBI imposed a monetary penalty of Rs 2.00 lakh on The Halol Urban Co-operative Bank Ltd., Panchmahal, Gujarat. The bank was found, after statutory inspection and review of related reports and correspondence, to have sanctioned a loan where a relative of one of its directors stood as guarantor, breached prudential inter-bank counterparty exposure limits, and not paid interest on matured term deposits from the date of maturity until repayment at the applicable rate. RBI said the action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, for non-compliance with its directions on loans and advances to directors/related parties, placement of deposits with other banks, and interest rate on deposits.

Why RBI Acted

Capital & exposure normsLending normsCustomer protection

RBI imposed a monetary penalty after statutory inspection found that the bank had sanctioned a loan where a relative of one of its directors stood as guarantor, breached the prudential inter-bank counterparty exposure limit, and failed to pay interest on matured term deposits from the date of maturity till repayment at the applicable rate. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, for non-compliance with RBI directions on loans and advances to directors/related concerns, placement of deposits with other banks, and interest rate on deposits.

Operating Impact

The bank must bear the penalty and continue operating, but the order serves as a regulatory censure for the cited compliance failures. There is no customer restitution direction in the release, but the findings highlight issues affecting director-linked lending, inter-bank exposures, and deposit interest handling.

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 2.00 L
Order Date
14 Dec 2023
Effective From
14 Dec 2023
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank