Way back in August 2011, RBI had imposed a penalty of Rs1lac on The Bechraji Nagrik Sahakari Bank Ltd., Mehsana (Gujarat). Again in May 2013, RBI has imposed a monetary penalty of Rs 1.00 lakh (Rupees one lakh only) on The Bechraji Nagrik Sahakari Bank Ltd., Mehsana (Gujarat)
This time the penalty is for violation of the RBI Directive No.5 dated April 29, 2003 read with Section 20 of the B.R. Act, 1949, (AACS) by granting loans to directors/relatives.
The RBI directive dt.29/04/2003, primarily deals with granting of loans and advances to the directors, their relatives and concerns in which they are interested.
In this context, the Joint Parliamentary Committee (JPC) which enquired into the stock market scam and matters relating thereto in paragraph 5.66 of its report (extracts enclosed) has made various recommendations. It has recommended that in order to prevent irregularities of the type which surfaced in the case of some of the cooperative banks examined by it, a full ban should be imposed on granting of loans and advances to the directors, their relatives and concerns in which they are interested.
Well, some cooperative banks seem interested always falling in the wrong books of RBI.
- RBI tightens screws on gold loans (thehindu.com)
- Reserve Bank of India penalizes Gujarat Mercantile Co-operative Bank Ltd., Ahmedabad (Gujarat) (simplybanking.wordpress.com)