RBI imposes monetary penalty on The Gadhinglaj Urban Co-operative Bank Limited, Gadhinglaj, Maharashtra

Case Brief

RBI imposed a monetary penalty of ₹10 lakh on The Gadhinglaj Urban Co-operative Bank Limited, Gadhinglaj, Maharashtra, by order dated August 09, 2021. The penalty was imposed for contravention of RBI directions relating to loans and advances to directors and related concerns, supervisory action framework, exposure norms and statutory other restrictions for UCBs, and KYC requirements. RBI’s inspection found that the bank had advanced a loan to a director, given fresh loans to the real estate sector in violation of instructions, extended unsecured advances beyond ₹5 lakh, and failed to carry out periodic review of risk categorization of accounts. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949.