Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹5.00 lakh on The Guntur Women Cooperative Urban Bank Ltd., Guntur, Andhra Pradesh, by order dated February 03, 2021. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949 after a statutory inspection found non-compliance with RBI directions on prohibition of loans and advances to directors or their relatives, income recognition and asset classification, and grant of loans against security of gold jewellery. RBI noted that the bank had granted loans to relatives of directors, had divergence in income recognition and asset classification, and violated loan-to-value and repayment guidelines in respect of gold loans. After considering the bank’s reply and oral submissions, RBI concluded that the violations were substantiated and warranted the penalty.
Action Snapshot
- Primary Impact
- Fine: Rs 5.00 L
- Entity Type
- Co-operative bank
- Location