Recorded RBI impact
Fine: Rs 20,000
Monetary penalty · Fresh imposition
Published by RBI
17 Jul 2025
Case Brief
The Reserve Bank of India imposed a monetary penalty on The Laxmi Vishnu Sahakari Bank Ltd., Ichalkaranji, Maharashtra, following a statutory inspection and supervisory findings of non-compliance with RBI directions on loans and advances to directors, their relatives, and firms or concerns in which they are interested. RBI concluded that the bank had sanctioned a loan to one of its directors, sustained the charge, and levied the penalty 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 review found non-compliance with RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. The sustained charge was that the bank had sanctioned a loan to one of its directors. 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 absorb the penalty and remain compliant with RBI’s lending restrictions concerning directors and related parties. The order does not pronounce on the validity of the underlying transaction, but it signals continued supervisory scrutiny and leaves the bank exposed to any further action RBI may choose to initiate.
Regulatory Basis
- Section 47A(1)(c)
- Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 20,000
- Order Date
- 14 Jul 2025
- Effective From
- 14 Jul 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank