RBI imposes monetary penalty on Shree Parswanath Co-operative Bank Ltd., Rajkot (Gujarat)
Case Brief
RBI imposed a penalty of ₹0.25 lakh on Shree Parswanath Co-operative Bank Ltd., Rajkot (Gujarat) under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The penalty followed inspection findings that the bank sanctioned a credit facility to an individual while two relatives of one of its directors acted as surety/guarantor, contrary to RBI directions on loans and advances to directors and related persons.
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after its inspection found that the bank had sanctioned one credit facility to an individual in which two relatives of one of its directors acted as surety/guarantor. RBI concluded this contravened its directions on loans and advances to directors etc., specifically the clarification relating to UCBs.
Severity Assessment
The action is a monetary penalty of ₹0.25 lakh, which falls within the lowest monetary band and carries no additional operational restriction.
The bank must absorb the monetary penalty and remain compliant with RBI directions on lending to directors and related sureties/guarantors. No additional business restriction was imposed by this release, but the finding signals regulatory scrutiny of related-party lending practices.
Published as Shree Parswanath Co-operative Bank Ltd., Rajkot (Gujarat)
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