Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty on The Madanapalle Co-operative Town Bank Ltd., Madanapalle, Chittoor District, Andhra Pradesh, under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). The penalty was for violation of Section 20 and Section 20A of the Act and RBI directives/guidelines on loans and advances to directors and their relatives. RBI issued a show-cause notice, considered the bank's written reply, and concluded that the violations were substantiated.