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

Case Brief

RBI, by order dated May 28, 2024, imposed a monetary penalty of Rs 1.00 lakh on Gujarat Ambuja Co-operative Bank Ltd., Ahmedabad, Gujarat. The penalty followed a statutory inspection with reference to the bank's financial position as on March 31, 2023, and related supervisory findings that the bank had not complied with RBI directions on loans and advances to directors, relatives, and firms/concerns in which they are interested, including clarification on directors acting as sureties/guarantors. RBI stated that the sustained charge was sanctioning loans where relatives of directors stood as guarantors. The action was taken under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.