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Reserve Bank of India on Thursday said that it has imposed a monetary penalty of Rs 5 lakh on Sankheda Nagarik Sahakari Bank Limited, which is based in Sankheda, Chhotaudepur, Gujarat.
RBI said that by an order dated December 7, 2023, it has imposed a monetary penalty on the bank for non-compliance with its directions on 'Loans and advances to directors, relatives and firms/concerns in which they are interested' read with RBI directions on 'Loans and Advances to Directors, etc.--Directors as Surety/Guarantors--Clarification' and 'Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs)'. "This penalty has been imposed in the exercise of powers conferred on RBI under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949," the press release said. The central bank said that in its statutory inspection of the bank with reference to its financial position as of March 31, 2022, and examination of the inspection report, risk assessment report, and all correspondence, it has been revealed that the bank-sanctioned loans were relatives of directors of the bank stood as guarantors and breached the prescribed inter-bank gross exposure limit as well as the prudential inter-bank counterparty exposure limit. "Consequently, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the said directions, as stated therein," the press release said. RBI said that after considering the bank's reply to the notice and oral submissions made by it during the personal hearing, it came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted the imposition of a monetary penalty on the bank. (ANI)
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