RBI imposes monetary penalty on Shri Mahila Sewa Sahakari Bank Ltd., Ahmedabad (Gujarat)

Case Brief

The Reserve Bank of India penalized Shri Mahila Sewa Sahakari Bank Ltd., Ahmedabad (Gujarat) by order dated December 21, 2022. The penalty was imposed after scrutiny and statutory inspection revealed contraventions of RBI directions on maintenance of CRR/SLR, loans and advances to directors and their relatives, declaration of dividend by UCBs, and transfer of long-unclaimed balances to the Depositor Education and Awareness Fund. RBI noted that the bank had not maintained the minimum CRR, had sanctioned credit facilities where directors' relatives were guarantors, had extended loans to directors/relatives, had declared dividend without prior permission despite CRR default, and had not transferred unclaimed balances to the DEAF, instead booking part of them as income. RBI concluded the charges were substantiated and imposed a monetary penalty under the Banking Regulation Act, 1949.