RBI Imposes a Penalty of 5 Crores on The Mehsana Urban Co-operative Bank of Gujarat, know the Reason
The Reserve Bank of India has imposed a fine of Rs 5 crore on Mehsana Urban Co-operative Bank in Gujarat. The central bank has imposed this penalty for lending by the bank to directors, relatives and the companies or firms with which it has an interest. The Reserve Bank of India imposed the fine through an order on 4 November.
The central bank said that it has taken this step till March 31, 2018, after examining the bank’s financial position. The penalty has been imposed by the bank for lending to directors, relatives and companies with whom it has interests and for breach of master instructions on Know Your Customer (KYC).
The Reserve Bank has clarified that the penalty has been imposed for loopholes in regulatory compliance and has nothing to do with the validity of any agreement made by Mehsana’s bank with its customers.
