Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹2.00 lakh on The Vriddhachalam Co-operative Urban Bank Ltd. (No.E 81), Vriddhachalam, 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 RBI’s directive prohibiting extension of loans and advances to directors/their relatives, referenced in Para 5 of the Master Circular dated July 1, 2013. RBI issued a show-cause notice, considered the bank’s written reply, and found the contravention substantiated.