RBI imposes monetary penalty on Imperial Urban Co-operative Bank Ltd., Jalandhar, Punjab

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Imperial Urban Co-operative Bank Ltd., Jalandhar, Punjab, by order dated March 10, 2023. RBI said the penalty was for contravention of Section 35A read with Section 56 of the Banking Regulation Act, 1949, after inspection findings showed the bank was not complying with RBI directions prohibiting sanctioning or renewal of loans and advances to directors and their relatives. RBI issued a show-cause notice, considered the bank’s reply, and then concluded the non-compliance was substantiated and warranted the penalty. RBI also clarified that the action was based on regulatory compliance deficiencies and did not pronounce on the validity of any customer transaction or agreement.