Recorded RBI impact
Fine: Rs 25,000
Monetary penalty · Fresh imposition
Published by RBI
4 Apr 2024
Case Brief
RBI, by order dated February 28, 2024, imposed a monetary penalty of ₹25,000 on The Tirupattur Urban Co-operative Bank Ltd., Tirupattur, Tamil Nadu. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, following a statutory inspection as of March 31, 2022. RBI said the bank had not complied with certain provisions of its directions on Exposure Norms and Statutory/Other Restrictions – UCBs, and specifically sustained the charge that it sanctioned loans to nominal members in excess of the prescribed ceiling.
Why RBI Acted
After a statutory inspection with reference to the bank's financial position as on March 31, 2022, RBI found supervisory findings of non-compliance with RBI directions on Exposure Norms and Statutory/Other Restrictions – UCBs. A show-cause notice was issued and, after considering the bank's reply and oral submissions, RBI sustained the charge that the bank sanctioned loans to nominal members beyond the prescribed ceiling, warranting 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 financial penalty, but the release does not impose a new operational restriction or license action. The notice and findings reflect regulatory non-compliance, and RBI reserves the right to initiate any further action if warranted.
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 25,000
- Order Date
- 28 Feb 2024
- Effective From
- 28 Feb 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank