Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
2 May 2024
Case Brief
RBI imposed a monetary penalty of Rs 1.00 lakh on The Udgir Urban Co-operative Bank Limited, Udgir, Maharashtra, after a statutory inspection and subsequent supervisory process. The bank was found to have failed to comply with RBI directions relating to Exposure Norms & Statutory/Other Restrictions – UCBs and Board of Directors – UCBs; RBI specifically sustained the charge that loans were sanctioned/renewed to a relative of the bank's director. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
Following a statutory inspection with reference to the bank's financial position as on March 31, 2022, RBI issued a show-cause notice for supervisory findings of non-compliance with RBI directions and related correspondence. After considering the bank's reply, oral submissions, and additional submissions, RBI sustained the charge that the bank had sanctioned/renewed loans to a relative of its director, in breach of the relevant RBI directions, and imposed 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 monetary penalty and remain subject to RBI supervision; the order does not itself impose a new operating restriction, but RBI notes that further action may be initiated separately. Depositors and other counterparties are not directly restricted by this release.
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 1.00 L
- Order Date
- 26 Apr 2024
- Effective From
- 26 Apr 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank