RBI levies Rs 2 lakh penalty on TDCC Bank for loan sanction to director

The Reserve Bank of India (RBI) has recently announced the imposition of a Rs 2 lakh penalty on Thane District Central Co-operative (TDCC) Bank. The penalty stems from alleged violations of banking regulations related to the sanctioning of a loan to one of the bank's directors.

The information was disclosed in an official release by Yogesh Dayal, Chief General Manager of RBI, on Friday, September 22.

The RBI, in its order dated November 28, invoked its authority under sections 20 and 56 of the Banking Regulation (BR) Act, 1949, to levy the penalty on TDCC Bank. This regulatory action was taken following a statutory inspection of the bank conducted by the National Bank for Agriculture and Rural Development (NABARD). The inspection focused on the bank's financial position as of March 31, 2022.

Upon examination of the inspection report and related correspondence, it was revealed that TDCC Bank had sanctioned a loan to one of its directors, a violation of the aforementioned sections of the BR Act.

The regulatory process unfolded with the issuance of a show-cause notice to the bank. Subsequently, after reviewing the bank's response to the notice and considering oral submissions made during a personal hearing, the RBI concluded that the charges of contravention of statutory provisions were substantiated.

This penalty underscores the RBI's commitment to upholding and enforcing the regulatory framework governing banking activities. The action serves as a reminder to financial institutions to adhere to the prescribed rules and regulations, emphasising the importance of maintaining transparency and compliance in the banking sector.

(With PTI inputs.)