RBI imposes monetary penalty on The Karnavati Co-operative Bank Ltd., Ahmedabad, Gujarat

Case Brief

The Reserve Bank of India imposed a monetary penalty of Rs 1.50 lakh on The Karnavati Co-operative Bank Ltd., Ahmedabad, Gujarat. RBI said the bank had violated directions relating to loans and advances to directors, their relatives and firms/concerns in which they are interested, as well as directions on fraud reporting by UCBs. The violations were identified during statutory inspection with reference to the bank's financial position as on March 31, 2022. RBI found that the bank sanctioned a loan where a relative of a director acted as guarantor, and also failed to report a fraud case to RBI within the prescribed timeline. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.