RBI imposes monetary penalty on Tirumangalam Co-operative Urban Bank Ltd., Tirumangalam, Tamil Nadu

Case Brief

RBI imposed a monetary penalty of Rs 25,000 on Tirumangalam Co-operative Urban Bank Ltd. by order dated February 28, 2024. The penalty was based on non-compliance with RBI directions on 'Board of Directors - UCBs' and 'Loans and advances to directors, their relatives, and firms/concerns in which they are interested'. After a statutory inspection with reference to the bank's financial position as on March 31, 2022, RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the charge of extending loans to its directors and their relative was sustained. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.