Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹2.00 lakh on Jalgaon District Co-operative Bank Ltd. under Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (as applicable to cooperative societies). RBI said the bank violated Section 20A of the B.R. Act, 1949 (AACS) by remitting debt due to the bank by Jalgaon Starch Factory, in which the then directors of the bank had an interest, without first obtaining RBI permission. RBI had issued a show-cause notice, considered the bank's written reply, and then concluded that the violation was substantiated and warranted the penalty.