Reserve Bank of India imposes monetary penalty on Indian Mercantile Co-operative Bank Limited

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹2 million on Indian Mercantile Co-operative Bank Limited by order dated September 26, 2018. RBI said the bank had contravened the All Inclusive Directions (AIDs) issued to it and had not complied with RBI guidelines on classification and reporting of frauds. The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949. RBI clarified that the action was based on regulatory compliance deficiencies and did not pronounce on the validity of any transaction or agreement with customers.