RBI imposes monetary penalty on Saraswat Co-operative Bank Limited, Mumbai

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹23 lakh on Saraswat Co-operative Bank Limited, Mumbai by order dated September 22, 2023. RBI said the bank had contravened Section 20(1)(b)(iii) read with Section 56 of the Banking Regulation Act, 1949 and the RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. The issue arose from a statutory inspection and related review materials, which showed that the bank renewed a credit facility to a borrower company while a bank director was also an independent director in that borrower company. RBI held the non-compliance substantiated and imposed the penalty under the BR Act.