RBI imposes fine on city cooperative bank for violating lending norms
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A press release issued by the RBI says that after inspection it was found that the bank sanctioned a loan to a party related to the director and did not follow the norms related to such advances.
The note further states that the urban cooperative bank (UCB) did not reduce the single borrower lending limit for fresh loans and advances, leading to a violation of directions to the cooperative under the RBI's supervisory action framework (SAF).
The RBI has further clarified that the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Sources said such small penalties under SAF following the RBI inspections help in preventing a larger financial crisis. This has helped in maintaining the financial health of the urban cooperative banks.
Nagpur: The Reserve Bank of India (RBI) has imposed a fine of Rs1.5 lakh on Nagpur's Dr Babasaheb Ambedkar Urban Cooperative Bank for flouting norms on lending to the directors, their relatives, or concerned entities.
A press release issued by the RBI says that after inspection it was found that the bank sanctioned a loan to a party related to the director and did not follow the norms related to such advances.
The note further states that the urban cooperative bank (UCB) did not reduce the single borrower lending limit for fresh loans and advances, leading to a violation of directions to the cooperative under the RBI's supervisory action framework (SAF).
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The RBI has further clarified that the action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Sources said such small penalties under SAF following the RBI inspections help in preventing a larger financial crisis. This has helped in maintaining the financial health of the urban cooperative banks.
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