RBI imposes monetary penalty on HCBL Co-operative Bank Ltd., Lucknow, Uttar Pradesh

Case Brief

RBI has imposed a monetary penalty of ₹11.00 lakh on HCBL Co-operative Bank Ltd., Lucknow, Uttar Pradesh, by order dated August 30, 2023. The penalty was imposed for non-compliance with RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested, as well as specific directions issued under the Supervisory Action Framework (SAF). RBI’s inspection, with reference to the bank’s financial position as on March 31, 2021, found that the bank had granted loans/advances to its director and relatives, sanctioned fresh loans and advances to single borrowers beyond 50% of applicable regulatory limits, and offered interest rates on deposits higher than those offered by State Bank of India. RBI concluded that the violations were substantiated and imposed the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.