RBI slaps fine on Mandya Co-operative Bank for violating norms by sanctioning loans to relative of bank’s sitting director

Mumbai, Oct 26 (KNN) The Reserve Bank of India has imposed a monetary penalty of Rs 50,000 on Mandya City Co-operative Bank Ltd., Mandya, for violating norms by sanctioning loans to the relative of one of the sitting directors of the bank.

In a release, the apex bank said, “The Reserve Bank of India has imposed a monetary penalty of Rs 50,000/- (Rupees fifty thousand only) on Mandya City Co-operative Bank Ltd., Mandya, in exercise of the powers vested in it under the provisions of Section 47A read with Section 46(4) of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) for violating RBI directives/guidelines by sanctioning loans to the relative of one of the sitting directors of the bank.”

RBI had issued a Show Cause Notice to the bank, in response to which the bank sought personal hearing.

After considering the facts of the case and bank’s representation in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of monetary penalty, the central bank said in the release. (KNN Bureau)