RBI imposes monetary penalty on The Mehsana Urban Co-operative Bank Ltd., Mehsana

Case Brief

The Reserve Bank of India imposed a monetary penalty of ₹15 lakh on The Mehsana Urban Co-operative Bank Ltd., Mehsana by order dated November 03, 2023. The penalty was for non-compliance with RBI directions on ‘Interest Rate on Deposits’. RBI said its inspection, based on the bank’s position as on March 31, 2021, revealed that the bank had opened Savings Bank accounts of ineligible trusts whose income was not exempt from income-tax. After considering the bank’s reply, additional submissions, and oral hearing, RBI concluded the contravention was proved and imposed the penalty under the Banking Regulation Act, 1949.