Recorded RBI impact
Fine: Rs 50,000
Monetary penalty · Fresh imposition
Published by RBI
9 May 2018
Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹0.50 lakh on Universal Co-operative Urban Bank Ltd., Mancherial, Telangana. The penalty was issued under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its directives and guidelines on loans and advances to directors and their relatives. After a show-cause notice, the bank's written reply, and a personal hearing, RBI concluded that the violations were substantiated and warranted the penalty.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), after concluding that the bank had violated RBI directives and guidelines relating to loans and advances to directors and their relatives. The bank received a show cause notice, submitted a written reply, and was given a personal hearing before the violations were held to be substantiated.
Operating Impact
The bank must absorb the monetary penalty; the release does not indicate any additional operational restriction. The action is backward-looking, but it may signal RBI scrutiny over governance and related-party lending compliance.
Regulatory Basis
- Section 47A (1) (c) read with Section 46 (4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
Action Facts
- Primary Impact
- Fine: Rs 50,000
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank