RBI imposed penalty on Purvanchal Co-operative Bank Ltd., Ghazipur, Uttar Pradesh

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹5,00,000 on Purvanchal Co-operative Bank Ltd., Ghazipur (U.P.) under Section 47A(1)(c) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI said the bank violated instructions/guidelines on finance for housing schemes for UCBs, lending to directors/their relatives/concerns in which they were interested, exceeding the maximum limit on unsecured advances, income recognition, asset classification, provisioning and other related matters for UCBs, and exceeding the individual/single exposure ceiling for lending operations. After issuing a show-cause notice, considering the bank’s written reply, and granting a personal hearing, RBI concluded that the violations were substantiated and warranted the penalty.