Banaras Mercantile Co-operative Bank Ltd., Varanasi , (U.P.) – Penalised

Case Brief

The Reserve Bank of India imposed a monetary penalty on Banaras Mercantile Co-operative Bank Ltd., Varanasi, 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 supervisory instructions issued under Section 36(1) of the Banking Regulation Act, 1949 (AACS), prudential norms on inter-bank gross exposure and counter party limit, and KYC guidelines. After a show-cause notice, the bank's written reply, and personal hearing, RBI concluded that the violations were substantiated and penalised the bank.