Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
22 Apr 2024
Case Brief
RBI imposed a monetary penalty of Rs 1 lakh on The Panvel Co-operative Urban Bank Ltd., Raigad, Maharashtra, through an order dated April 01, 2024. The penalty was imposed after a statutory inspection and a subsequent show-cause process, with RBI concluding that the bank had sanctioned fresh loans carrying risk weight of more than 100% in violation of specific directions issued under the Supervisory Action Framework for Primary (Urban) Co-operative Banks. RBI stated that the action was based on deficiencies in regulatory compliance and was without prejudice to any other action that may be initiated.
Why RBI Acted
Following a statutory inspection with reference to the bank's financial position as on March 31, 2023, RBI issued a show-cause notice based on supervisory findings of non-compliance with RBI directions and related correspondence. After considering the bank's reply, RBI held that the charge of sanctioning fresh loans carrying risk weight of more than 100% in violation of specific directions issued under the Supervisory Action Framework for Primary (Urban) Co-operative Banks was sustained, and imposed a monetary penalty 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 monetary penalty and remains exposed to further RBI action on the same or related compliance issues. The order does not invalidate customer transactions, but it signals ongoing supervisory concern around lending discipline under SAF directions.
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 1.00 L
- Order Date
- 1 Apr 2024
- Effective From
- 1 Apr 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank