Case Brief
RBI, by order dated September 02, 2021, imposed a monetary penalty of ₹1.00 lakh on The Kosamba Mercantile Co-operative Bank Ltd., Kosamba, Dist. Surat (Gujarat). The penalty was for non-compliance with RBI's directions in the circular on loans and advances to directors, relatives, and firms/concerns in which they are interested, after inspection findings showed the bank had sanctioned loans to relatives of a director. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and then held the charge substantiated. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Action Snapshot
- Primary Impact
- Fine: Rs 1.00 L
- Entity Type
- Co-operative bank
- Location
- Kosamba, Gujarat