The Mehsana Urban Co-operative Bank Ltd. – Penalised

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on The Mehsana Urban Co-operative Bank Ltd., Mehsana, under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated directives/guidelines on admission of co-operative societies as nominal members, exceeded the permissible exposure to real estate, failed to comply with KYC norms, and waived interest on a director-related advance in contravention of Section 20A of the Act. After issuing a show-cause notice, RBI reviewed the bank's written response and personal submissions and concluded that the violations were substantiated.