RBI imposes monetary penalty on The Jolarpet Co-operative Urban Bank Limited, Dist. Vellore, Tamil Nadu

Case Brief

RBI imposed a monetary penalty of ₹50,000 on The Jolarpet Co-operative Urban Bank Limited, Dist. Vellore, Tamil Nadu, by an order dated October 12, 2023. The penalty was for non-compliance with RBI’s directions on ‘Board of Directors - UCBs’ read with directions on ‘Loans and advances to directors, their relatives, and firms/concerns in which they are interested’. RBI’s inspection revealed that the bank had extended loans to directors and their relatives. After issuing a show-cause notice and considering the bank’s reply and oral submissions, RBI held that the non-compliance was substantiated and warranted the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.