The Ahmedabad Mercantile Co-operative Bank Limited, Ahmedabad, Gujarat – Penalised

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 1.00 lakh on The Ahmedabad Mercantile Co-operative Bank Limited, Ahmedabad, Gujarat, under Section 47(A)(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The RBI said the bank had floated a trust for the general public, enrolled co-operative societies as members, and not displayed its name correctly in advertisements, publicity material, stationery items, and other materials, thereby violating the Banking Regulation, 1949 (AACS) and other RBI instructions. After a show-cause notice, the bank’s written reply, and personal hearing submissions, the RBI concluded that the violations were substantiated and warranted the penalty.