Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of Rs 2.00 lakh on Sardarganj Mercantile Co-op. Bank Ltd., Sardarganj, Dist. Anand, Gujarat. RBI said the bank allowed premature withdrawal of fixed deposits despite operational instructions issued under section 36(1) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). RBI also found that the bank did not reckon accumulated loss while computing capital fund for prudential exposure limits and did not obtain RBI approval for the computation of its prudential exposure limit. The penalty was levied under section 47A(1)(b) read with section 46(4) of the Banking Regulation Act, 1949 after considering the bank’s reply and submissions.