Recorded RBI impact
Fine: Rs 6.70 L
Monetary penalty · Fresh imposition
Published by RBI
14 Feb 2025
Case Brief
RBI, by an order dated February 10, 2025, imposed a monetary penalty of ₹6.70 lakh on Ujjivan Small Finance Bank Limited. The penalty was imposed for non-compliance with RBI directions on 'Loans and Advances - Statutory and Other Restrictions'. According to the press release, the bank failed to issue loan agreements to certain borrowers at the time of sanction/disbursement of loans. RBI stated that the action was based on supervisory findings from ISE 2023 and was taken under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
Why RBI Acted
Following its statutory Inspection for Supervisory Evaluation (ISE 2023), RBI found a sustained charge that Ujjivan Small Finance Bank Limited had not complied with certain RBI directions on 'Loans and Advances - Statutory and Other Restrictions'. Specifically, the bank failed to issue loan agreements to certain borrowers at the time of sanction or disbursement of loans. RBI imposed the penalty under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, after considering the bank's reply, additional submissions, and oral submissions.
Operating Impact
The bank must absorb the financial penalty and continue ensuring compliance with RBI's loan documentation directions. The release does not impose any additional operational restriction, but it signals heightened supervisory scrutiny over its lending documentation practices.
Regulatory Basis
- Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 6.70 L
- Order Date
- 10 Feb 2025
- Effective From
- 10 Feb 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank