Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
17 Aug 2023
Case Brief
RBI, by order dated August 08, 2023, imposed a monetary penalty of Rs 1 lakh on Vishwanathrao Patil Murgud Sahakari Bank Ltd., Murgud, Maharashtra. The penalty was imposed because the bank had not complied with RBI directions on Exposure Norms and Statutory/Other Restrictions - UCBs; inspection findings showed loans were sanctioned to nominal members for purposes other than those prescribed. RBI said the penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after considering the bank's reply to the show-cause notice.
Why RBI Acted
Based on its inspection as of March 31, 2022, RBI found that Vishwanathrao Patil Murgud Sahakari Bank Ltd. had sanctioned loans to nominal members for purposes other than those permitted under the RBI directions on Exposure Norms and Statutory/Other Restrictions - UCBs. After considering the bank's reply to the show-cause notice, RBI concluded that the charge of non-compliance was substantiated and imposed a monetary penalty under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.
Operating Impact
The bank must absorb the monetary penalty; the release does not describe any additional operational restriction or withdrawal of business permissions. The findings may also signal closer supervisory scrutiny of the bank's lending practices, especially loans to nominal members and compliance with exposure norms.
Regulatory Basis
- Section 47 A (1) (c)
- Section 46 (4) (i)
- Section 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 8 Aug 2023
- Effective From
- 8 Aug 2023
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank