Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty on The Muslim Co-operative Bank Ltd., Mysuru, Karnataka, after finding that the bank had violated RBI instructions and a directive by granting loans to the relatives of directors. The penalty was imposed 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, reviewed the bank's written response, and concluded that the violations were substantiated.