CKP Co-operative Bank Ltd., Mumbai, Maharashtra - Penalised

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 5.00 lakh on CKP Co-operative Bank Ltd., Mumbai, Maharashtra 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 directives/guidelines relating to opening of on-site ATMs, lending to borrowers outside its area of operations, exposure to housing and real estate, single-party exposure limits, loans to directors, issuance of a bank guarantee to an entity not banking with it, non-filing of Suspicious Transaction Reports with FIU-IND, exceeding limits on unsecured advances, and sanctioning overdraft against third-party fixed deposits to one of its directors. After a show-cause notice and review of the bank's reply, RBI concluded the violations were substantiated and imposed the penalty.