Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty on Gujarat Mercantile Co-operative Bank Ltd., Ahmedabad under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS). RBI said the bank violated provisions of the Act and RBI directives/instructions that prohibit loans and advances to directors, their relatives, and related concerns. After issuing a show-cause notice and considering the bank’s written reply and personal submissions, RBI concluded that the violations were sustained and warranted the penalty of Rs 2 lakh.