Recorded RBI impact
Fine: Rs 2.00 L
Monetary penalty · Fresh imposition
Published by RBI
8 May 2023
Case Brief
By an order dated May 04, 2023, RBI imposed a monetary penalty of ₹2.00 lakh on The Trichur Urban Co-operative Bank Ltd., Thrissur, Kerala. The penalty was imposed for non-compliance with RBI directions on Management of Advance – UCBs, after an inspection revealed instances of sanction of gold loans in breach of the cap under the bullet repayment scheme. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and concluded that the violation was substantiated. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Why RBI Acted
RBI imposed a monetary penalty on The Trichur Urban Co-operative Bank Ltd., Thrissur, Kerala for non-compliance with directions issued on Management of Advance – UCBs. The inspection for the bank’s position as on March 31, 2021 found instances of sanction of gold loans in breach of the cap under the bullet repayment scheme. RBI concluded that the charge was substantiated after considering the bank’s reply and oral submissions, and imposed the penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949 (AACS).
Operating Impact
The bank must bear the ₹2 lakh penalty and continue complying with RBI’s directions on advances, particularly the cap on gold loans under the bullet repayment scheme. No broader business restriction is stated, but the finding signals ongoing supervisory scrutiny of lending compliance.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949 (AACS)
Action Facts
- Primary Impact
- Fine: Rs 2.00 L
- Order Date
- 4 May 2023
- Effective From
- 4 May 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank