Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of Rs 4.00 lakh on The Associate Co-operative Bank Ltd., Surat (Gujarat) by order dated January 19, 2022. RBI said the bank had contravened directions on loans and advances to directors, relatives, and firms/concerns in which they were interested, and had also not complied with the Master Directions on Know Your Customer (KYC). The violations were identified during statutory inspection with reference to the bank’s financial position as on March 31, 2019, and after examination of related correspondence and the bank’s reply to the show-cause notice. RBI clarified that the penalty was for regulatory non-compliance and did not pronounce on the validity of any transaction or agreement.