Reserve Bank of India imposes monetary penalty on The Citizens Co-operative Bank Ltd., Rajkot (Gujarat)

Case Brief

RBI, by order dated March 26, 2021, imposed a monetary penalty of Rs 1 lakh on The Citizens Co-operative Bank Ltd., Rajkot (Gujarat). The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949, after statutory inspection found non-compliance with RBI directions, especially those governing loans and advances to directors, their relatives, and firms/concerns in which they are interested. The inspection also flagged issues related to board professionalisation and reporting of advances to directors and their relatives, but RBI concluded that the specific charge on loans and advances to interested persons was substantiated.