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The Reserve Bank of India has, 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)
imposed a monetary penalty of Rs.5.00 lakh (rupees five lakh only) on the Jamkhed
Merchants Co-operative Bank Ltd., Jamkhed, Dist. Ahmednagar for violation of
the Reserve Bank of India’s directives dated October 1, 2003 prohibiting loans
and advances to directors and their relatives and the firms/companies/concerns
in which they are interested with effect from the above date and directive dated
April 1, 2000 on credit exposure limits for individual borrowers.
The Reserve Bank of India had issued
a show cause notice to the bank, in response to which the 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 the bank.
P.V.Sadanandan
Manager
Press Release : 2006-2007/719
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