RBI imposes Monetary Penalty on The Bhuj Mercantile Co-operative Bank Ltd., Ahmedabad (Gujarat)

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 5 lakh on The Bhuj Mercantile Co-operative Bank Ltd., Ahmedabad (Gujarat) 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 imposed because the bank did not adhere to RBI's operational instructions issued under Section 35A and the supervisory instructions that were put in place when earlier Section 35A directions were withdrawn. RBI said the violation was substantiated after considering the bank's reply and personal submissions to the show-cause notice.