RBI imposes monetary penalty on The Vaijapur Merchants Co-operative Bank Ltd., Vaijapur, Maharashtra

Case Brief

By an order dated April 25, 2024, RBI imposed a monetary penalty of Rs 2.50 lakh on The Vaijapur Merchants Co-operative Bank Ltd., Vaijapur, Maharashtra. The penalty was imposed under section 47A(1)(c) read with section 46(4)(i) and section 56 of the Banking Regulation Act, 1949, after supervisory findings showed non-compliance with RBI directions under the Supervisory Action Framework (SAF). RBI concluded that the bank had sanctioned fresh hypothecation loans beyond the revised exposure limit, and this contravention warranted the penalty after consideration of the bank's reply to the show-cause notice.