Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of Rs. 5 lakh on Shri B.J.Khatal Janata Sahakari Bank Ltd., Sangamner, Maharashtra. The penalty was levied for violation of RBI directives prohibiting loans and advances to directors, their relatives, and firms/companies/concerns in which they are interested, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI issued a show-cause notice, considered the bank’s written reply and the action taken, and concluded that the violation was substantiated and deserved penalty.