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

Case Brief

By an order dated May 22, 2024, RBI imposed a monetary penalty of ₹1.00 lakh on The Gandhinagar Urban Co-operative Bank Ltd., Gandhinagar, Gujarat. The action followed a statutory inspection and a show-cause process in which RBI found non-compliance with directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested, including clarification on directors acting through sureties/guarantors. RBI stated that the bank had sanctioned or renewed loans where relatives of directors stood as guarantors, and that the charge was sustained after considering the bank's reply and oral submissions. The penalty was imposed under the Banking Regulation Act, 1949.