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

Case Brief

By order dated January 19, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on The Navnirman Co-operative Bank Ltd., Ahmedabad, Gujarat. The penalty was for non-compliance with RBI’s directions on loans and advances to directors, relatives, and firms/concerns in which they are interested, read with the clarification on directors acting as sureties/guarantors. RBI said its statutory inspection found that the bank had sanctioned loans where a relative of a director stood as guarantor. After considering the bank’s reply and oral submissions, RBI concluded the charge of non-compliance was substantiated and that a penalty was warranted under the Banking Regulation Act, 1949.