Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹1.00 lakh on The Varachha Co-operative Bank Ltd., Surat (Gujarat), by order dated September 16, 2022. RBI said the bank contravened its directions on loans and advances to directors and related surety/guarantor restrictions, after inspection found that two credit facilities were sanctioned to individuals with a relative of one of the bank’s directors acting as surety/guarantor. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.