Reserve Bank Penalises Jamkhed Merchants Co-op.Bank Ltd., Jamkhed, Dist.Ahmednagar

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs. 5 lakh on Jamkhed Merchants Co-operative Bank Ltd., Jamkhed, Dist. Ahmednagar under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated its directives dated October 1, 2003 prohibiting loans and advances to directors, their relatives, and firms/companies/concerns in which they are interested, and its directive dated April 1, 2000 on credit exposure limits for individual borrowers. RBI had issued a show-cause notice, considered the bank's written reply and action taken, and concluded that the violations were substantiated, warranting the penalty.