The Surat Mercantile Co-operative Bank Ltd., Surat, Dist. Surat – Penalised

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on The Surat Mercantile Co-operative Bank Ltd., Surat, Dist. Surat under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated instructions on disposal of non-banking assets, donations, purchasing cheques beyond the ceiling of Rs 0.20 lakh per instrument, and collecting third-party 'Account Payees' cheques. After considering the bank's written reply to the show-cause notice, RBI concluded the contraventions were substantiated and justified the penalty.