RBI imposes monetary penalty on Dhanera Mercantile Co-operative Bank Ltd., Dhanera, Gujarat

Case Brief

The Reserve Bank of India imposed a monetary penalty on Dhanera Mercantile Co-operative Bank Ltd., Dhanera, Gujarat, by order dated August 31, 2023. RBI said the bank failed to comply with directions relating to loans and advances to directors, their relatives and connected firms/concerns, loans where directors' relatives acted as guarantors, and placement of deposits with other banks by primary (urban) co-operative banks. The inspection also revealed that the bank sanctioned credit facilities to directors/relatives and breached prudential inter-bank gross exposure and counter-party exposure limits. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.