RBI imposes monetary penalty on Tumkur Grain Merchants Co-operative Bank Limited, Karnataka

Case Brief

RBI imposed a monetary penalty of ₹1 lakh on Tumkur Grain Merchants Co-operative Bank Limited, Karnataka, following a statutory inspection with reference to its financial position as on March 31, 2024. The penalty was imposed for non-compliance with specific directions issued under the Supervisory Action Framework (SAF). RBI said the bank had sanctioned fresh loans and advances carrying risk-weight of more than 100%, offered fixed deposit interest rates higher than those offered by the State Bank of India, and sanctioned/renewed credit facilities to sectors having a high level of NPAs/defaults. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.