RBI imposes penalty on Shree Mahalaxmi Mercantile Co-operative Bank Ltd., Dabhoi, Dist. Vadodara (Gujarat)

Case Brief

The Reserve Bank of India imposed a monetary penalty on Shree Mahalaxmi Mercantile Co-operative Bank Ltd., Dabhoi, Dist. Vadodara (Gujarat), under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI found violations of operational instructions issued under Section 36(1) of the B R Act, 1949 (AACS) and RBI guidelines governing loans and advances to directors, their relatives, and concerns in which they are interested. After issuing a Show Cause Notice, considering the bank’s written reply and personal submission, RBI concluded that the violations were substantiated and warranted the penalty.