Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
7 Mar 2022
Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on The Tadpatri Cooperative Town Bank Ltd., Anantapur District, Andhra Pradesh, by order dated March 01, 2022. RBI said the bank had violated directions relating to prohibition of loans and advances to directors and their relatives and connected firms/concerns, as well as Income Recognition, Asset Classification, Provisioning and other related matters for urban co-operative banks. 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 a notice, reply, and personal hearing confirmed the non-compliance.
Why RBI Acted
RBI imposed a monetary penalty after inspection reports for the bank's financial position as on March 31, 2019 and March 31, 2020 found violations/non-compliance with directions prohibiting loans and advances to directors, their relatives and related firms/concerns, and with Income Recognition, Asset Classification and Provisioning Norms. A show-cause notice was issued, and after considering the bank's reply and oral submissions, RBI concluded the charges were substantiated and warranted 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 and continue complying with RBI's directions on lending to directors and prudential accounting/provisioning norms. The order does not invalidate customer transactions, but it signals continued supervisory scrutiny of the bank's regulatory compliance.
Regulatory Basis
- Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 1 Mar 2022
- Effective From
- 1 Mar 2022
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank