Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on Adarsh Mahila Mercantile Co-operative Bank Ltd., Muzaffarnagar under Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949. The violation related to non-adherence to RBI directions on sanction of loans to directors and entities in which they are interested, specifically the ‘Board of Directors-UCB’ directions. RBI’s inspection report for the bank’s financial position as on March 31, 2020 found the contravention, and the penalty followed a show-cause notice, the bank’s reply, and an oral hearing.