The Reserve Bank of India has imposed a monetary penalty of Rupees five lakh on Shree Mahalaxmi Mercantile Co-operative Bank which is based in Dabhoi in the district Vadodara (Gujarat).
The regulator has faulted the urban cooperative bank on violation of operational instructions issued by RBI u/s 36 (1) of the B R Act, 1949 (AACS) and RBI guidelines for loans and advances to directors/their relatives/concerns in which they are interested.
The Reserve Bank of India had issued a Show Cause Notice to the bank based on the finding of inspection for the financial position as on March 31, 2014, in response to which the bank submitted a written reply and made personal submission to the Regional Director, RBI, Ahmedabad.
After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.