Case Brief
What Happened
RBI, by an order dated October 13, 2023, imposed a monetary penalty of Rs 50,000 on The Khambhat Nagarik Sahakari Bank Ltd., Khambhat, Gujarat. The bank was found to have sanctioned loans where a relative of one of its directors stood as guarantor, breaching RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested, along with the clarification on directors acting as sureties/guarantors. RBI stated 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.