Recorded RBI impact
Fine: Rs 5.00 L
Monetary penalty · Fresh imposition
Published by RBI
3 Aug 2016
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5,00,000 on The Raipur Urban Mercantile Co-operative Bank Limited, Raipur under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty followed a show-cause process and was based on RBI's finding that the bank violated directives/guidelines prohibiting the grant of loans and advances to its directors, their relatives, and concerns in which they are interested.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies) after finding that the bank violated RBI directives/guidelines on prohibition of loans and advances to its directors, their relatives, and related concerns. The bank had submitted a written reply to a show-cause notice, but RBI concluded the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty and is put on notice for non-compliance with RBI lending and conflict-of-interest norms. The action does not indicate any additional operating restriction, but it underscores that similar violations may attract further supervisory or penal consequences.
Regulatory Basis
- Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 5.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank