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

Case Brief

By an order dated March 07, 2022, RBI imposed a monetary penalty of Rs 1.00 lakh on The Navnirman Co-operative Bank Ltd., Ahmedabad (Gujarat). The penalty was imposed after inspection found that the bank sanctioned a loan to a relative of one of its directors and granted loans where relatives of directors stood as surety/guarantor, contrary to RBI directions on loans and advances to directors, their relatives, and related firms/concerns, as well as clarification on directors acting as sureties/guarantors for UCBs. RBI stated that the action was based on deficiencies in regulatory compliance and did not pronounce on the validity of any customer transaction.