Case Brief
The Reserve Bank of India imposed a monetary penalty of Rs 2,00,000 on The Lakhvad Nagarik Sahakari Bank Ltd., Lakhvad, Dist. Mehsana, Gujarat, for violating RBI directions relating to loans and advances to directors, their relatives and firms/concerns in which they are interested, as well as directions on placement of deposits with other banks by primary urban co-operative banks. The statutory inspection found that the bank sanctioned a loan to a director's relative, sanctioned loans where directors' relatives acted as guarantors, and breached prudential inter-bank gross exposure and counterparty exposure limits. RBI stated that the penalty was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement with customers.
Action Snapshot
- Primary Impact
- Fine: Rs 2.00 L
- Entity Type
- Co-operative bank
- Location