Reserve Bank imposes penalty on two Cooperative Banks from Maharastra

1. The Reserve Bank of India has, imposed a monetary penalty of Rs.1.00 lakh (Rupees One Lakh only) on the Kokan Mercantile Co-operative Bank Ltd., Mumbai, Maharashtra, for violating RBI directive on limits on credit exposure to single borrower/group of borrowers. The penalty was imposed in exercise of powers vested in it under the provisions of Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies).

2. The Reserve Bank of India has imposed a monetary penalty of Rs.5.00 lakh (rupees five lakh only) on the Shri B.J.Khatal Janata Sahakari Bank Ltd., Sangamner, Maharashtra for violation of the Reserve Bank of India’s directives prohibiting loans and advances to directors and their relatives and the firms/companies/concerns in which they are interested with effect from the October 1, 2003. The penalty was imposed in exercise of powers vested in it under the provisions of Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies)µ

In both cases, Reserve Bank of India had issued a show cause notice to the bank, in response to which the respective bank submitted a written reply. Based on the reply and the action taken by the bank in this regard, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of penalty. Accordingly it penalised both the banks.

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