Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on Madheshwari Urban Development Co-operative Bank Ltd., Madha, Maharashtra, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI found that the bank sanctioned unsecured salary loans beyond the prescribed ceiling, exceeded the permissible unsecured advances limit of 15% of NDTL, and granted unsecured advances to an entity whose Chairman was the same person as the bank’s Chairman. After a show-cause notice and consideration of the bank’s written reply, RBI concluded that the violations were substantiated and warranted the penalty.
Action Snapshot
- Primary Impact
- Fine: Rs 1.00 L
- Entity Type
- Co-operative bank
- Location
- Madha, Maharashtra