Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
6 Oct 2021
Case Brief
By an order dated October 05, 2021, RBI imposed a monetary penalty of Rs 1 lakh on The Kheda People’s Co-operative Bank Ltd., Kheda (Gujarat). The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after RBI found non-compliance with its directions on loans and advances to directors, relatives, and firms/concerns in which they are interested. The bank’s statutory inspection, with reference to its financial position as on March 31, 2019, and the examination of related correspondence, revealed the contravention. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the charge was substantiated.
Why RBI Acted
RBI found, based on statutory inspection as of March 31, 2019 and related correspondence, that the bank had not complied with directions issued by RBI on loans and advances to directors, relatives, and firms/concerns in which they are interested. After a show-cause notice, reply, and oral hearing, RBI concluded the charge was substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty; the release does not impose any additional operating restriction or deadline beyond the penalty order. The underlying compliance issue concerns lending to connected parties, which may remain relevant for supervisory follow-up.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 5 Oct 2021
- Effective From
- 5 Oct 2021
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank