Case Brief
RBI imposed a monetary penalty of Rs 50,000 on The Lunawada Peoples Co-operative Bank Ltd., Mahisagar (Gujarat) by order dated September 27, 2022. The bank was found to have contravened RBI directions relating to loans and advances to directors, their relatives, and firms/concerns in which they are interested, as well as directions on directors' relatives acting as sureties/guarantors. The violation arose from RBI's statutory inspection and related examination, which found that the bank had sanctioned three loans to directors' relatives and five loans where directors' relatives stood as surety/guarantors. RBI stated that the penalty was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement with customers.
Action Snapshot
- Primary Impact
- Fine: Rs 50,000
- Entity Type
- Co-operative bank
- Location