RBI penalises Kisan Nagari Sahakari Bank Maryadit, Parbhani

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on Kisan Nagari Sahakari Bank Maryadit, Parbhani under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was for violation of Section 35(2) and 46(1) of the Act relating to non-disclosure of a bank guarantee issued, along with breach of RBI directives on Guarantees, Co-Acceptance and Letter of Credit. RBI issued a show-cause notice, considered the bank's written reply, and concluded that the violations were substantiated and warranted penalty.