Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Feb 2018
Case Brief
The Reserve Bank of India penalised The Ramakrishna Mutually Aided Co-operative Urban Bank Ltd., Nidadavole, Andhra Pradesh, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found violations of its directives and guidelines on loans and advances to directors and their relatives. After issuing a show-cause notice, considering the bank’s reply, and granting personal hearing, RBI concluded that the breaches were substantiated and imposed a monetary penalty of Rs 1 lakh.
Why RBI Acted
The Reserve Bank of India 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). The bank was found to have violated RBI directives and guidelines relating to loans and advances to directors and their relatives. RBI issued a show-cause notice, considered the bank's written reply and personal hearing, and concluded that the violations were substantiated and warranted penalty.
Operating Impact
The bank must absorb the monetary penalty; the release does not describe any suspension, restriction on operations, or deadline affecting customers. The conduct finding may be relevant for future supervisory scrutiny, especially around lending to insiders and related parties.
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 1.00 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank