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Tirumangalam Co-operative Urban Bank Ltd

Co-operative bankTirumangalam, Tamil Nadu

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 25,000

Monetary penalty · Fresh imposition

S1

Published by RBI

4 Apr 2024

Case Brief

RBI imposed a monetary penalty of Rs 25,000 on Tirumangalam Co-operative Urban Bank Ltd. by order dated February 28, 2024. The penalty was based on non-compliance with RBI directions on 'Board of Directors - UCBs' and 'Loans and advances to directors, their relatives, and firms/concerns in which they are interested'. After a statutory inspection with reference to the bank's financial position as on March 31, 2022, RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the charge of extending loans to its directors and their relative was sustained. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

Why RBI Acted

Governance oversightLending norms

RBI imposed a monetary penalty after its statutory inspection found non-compliance with directions applicable to urban co-operative banks relating to Board of Directors and loans/advances to directors, their relatives, and firms/concerns in which they are interested. RBI stated that the charge of extending loans to its directors and their relative was sustained, following supervisory findings, a show-cause notice, and consideration of the bank's reply and oral submissions. The penalty was imposed 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 continue ensuring compliance with RBI directions on governance and lending to directors and connected parties. The release does not impose any new operational restriction, but RBI notes that the penalty is without prejudice to any other action it may initiate.

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