Reserve Bank of India imposes monetary penalty on Gayatri Co-operative Urban Bank Ltd., Jagtial, Telangana State

Case Brief

The Reserve Bank of India imposed a penalty of Rs 1 lakh on Gayatri Co-operative Urban Bank Ltd., Jagtial, Telangana, for contravention of Section 9 read with Section 56 of the Banking Regulation Act, 1949 and for non-compliance with RBI directions under the Master Circular on Exposure Norms and Statutory / Other Restrictions applicable to UCBs. RBI said the inspection revealed that the bank held non-banking assets beyond the permissible period without RBI approval and breached the ceiling on sanctioning unsecured advances to individual borrowers. The action was taken under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Act after considering the bank’s reply and oral submissions.