RBI imposes monetary penalty on the National Urban Co-operative Bank Limited, Pratapgarh (UP)

Case Brief

By an order dated April 27, 2023, RBI imposed a monetary penalty of ₹10.00 lakh on National Urban Co-operative Bank Limited, Pratapgarh (UP). The penalty was imposed because the bank contravened section 35A and section 36(1)(a) read with section 56 of the Banking Regulation Act, 1949 by failing to comply with specific RBI directions. The inspection report found that the bank sanctioned fresh loans and advances despite directions under a Supervisory Action Framework to stop sanction and disbursal of such loans and advances. After considering the bank’s reply and oral submissions, RBI held the non-compliance substantiated and levied the penalty under section 47A(1)(c) read with section 46(4)(i) and section 56 of the Act.