RBI imposes monetary penalty on The Mettupalayam Co-operative Urban Bank Limited, Tamil Nadu

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹1.50 lakh on The Mettupalayam Co-operative Urban Bank Limited, Tamil Nadu, after finding non-compliance with RBI directions on loans and advances to directors, their relatives, and related firms/concerns, as well as exposure norms and statutory/other restrictions applicable to UCBs. Following supervisory inspection, RBI issued a show-cause notice, considered the bank's reply and oral submissions, and sustained the charges that the bank had sanctioned a director-related loan and loans to nominal members beyond the prescribed regulatory limit. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.