RBI imposes penalty on The Godhra Urban Co-operative Bank Ltd., Godhra, Dist. Panchmahal (Gujarat)

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on The Godhra Urban Co-operative Bank Ltd., Godhra, Dist. Panchmahal (Gujarat), after finding that the bank had issued a large number of ‘at par’ cheques to a single party on the same day in cash for values just below ₹50,000, in circumvention of RBI guidelines. The penalty was imposed under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies), after the bank’s show-cause reply and personal submission were considered and the violation was found substantiated.