RBI imposes monetary penalty on The Halol Urban Co-operative Bank Ltd., Panchmahal, Gujarat

Case Brief

By an order dated December 14, 2023, RBI imposed a monetary penalty of Rs 2.00 lakh on The Halol Urban Co-operative Bank Ltd., Panchmahal, Gujarat. The bank was found, after statutory inspection and review of related reports and correspondence, to have sanctioned a loan where a relative of one of its directors stood as guarantor, breached prudential inter-bank counterparty exposure limits, and not paid interest on matured term deposits from the date of maturity until repayment at the applicable rate. RBI said the action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, for non-compliance with its directions on loans and advances to directors/related parties, placement of deposits with other banks, and interest rate on deposits.