RBI imposes monetary penalty on Makarpura Industrial Estate Co-operative Bank Ltd., Dist. Vadodara, Gujarat

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹2.00 lakh on Makarpura Industrial Estate Co-operative Bank Ltd., Dist. Vadodara, Gujarat, by order dated September 18, 2023. RBI said the bank contravened Section 26A(2) of the Banking Regulation Act, 1949 and its directions on loans and advances to directors, relatives, and firms/concerns in which they are interested. The inspection process found that the bank had not transferred the eligible amount to the Depositor Education and Awareness Fund and had sanctioned a loan where a relative of a director acted as guarantor. RBI issued a show-cause notice, considered the bank's reply and oral submissions, and concluded that the contraventions were substantiated, leading to the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act.