Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹0.25 lakh on Shree Botad Mercantile Co-operative Bank Ltd., Botad (Gujarat) by order dated September 22, 2022. RBI said the bank had sanctioned credit facilities to individuals where relatives of the bank's directors stood as guarantors, contrary to RBI directions on loans and advances to directors and related surety/guarantor arrangements. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, after considering the bank's reply and oral submissions.