RBI imposes monetary penalty on The Arni Co-operative Town Bank Limited, Tamil Nadu

Case Brief

RBI imposed a monetary penalty of ₹2 lakh on The Arni Co-operative Town Bank Limited, Tamil Nadu, after a statutory inspection and subsequent show-cause proceedings. The bank was found to have violated RBI directions on prudential norms for capital adequacy, exposure norms/statutory restrictions, and gold loan bullet repayment lending, including refunding share capital despite CRAR being below the regulatory minimum, extending loans without complying with share-linking-to-borrowings requirements, lending beyond prescribed limits to nominal members, and sanctioning gold loans above the permitted limit. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.