RBI imposes monetary penalty on Janseva Co-operative Bank Limited, Nashik, Maharashtra

Case Brief

By an order dated February 13, 2024, RBI imposed a monetary penalty of ₹50,000 on Janseva Co-operative Bank Limited, Nashik, Maharashtra. The penalty was levied for non-compliance with RBI directions on 'Loans and Advances to directors, relatives and firms/concerns in which they are Interested' read with 'Loans and Advances to Directors etc. - Directors as surety/guarantors – Clarification'. RBI's inspection for the bank's financial position as on March 31, 2022, found that it had sanctioned a director-related loan and another loan where a relative of a director acted as guarantor. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. RBI noted that the action was based on deficiencies in regulatory compliance and was not intended to pronounce on the validity of any transaction or agreement.