Case Brief
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on The Lunawada Peoples’ Co-operative Bank Ltd., Lunawada, Dist. Mahisagar (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 that the bank had issued demand drafts to a single party on the same day in cash for amounts just below ₹50,000, which was treated as circumvention of RBI guidelines. After issuing a show-cause notice and considering the bank’s written reply and personal submission, RBI concluded that the violation was substantiated and penalty was warranted.
Action Snapshot
- Primary Impact
- Fine: Rs 1.00 L
- Entity Type
- Co-operative bank
- Location
- Lunawada, Gujarat