Case Brief
What Happened
RBI imposed a monetary penalty of ₹5,93,30,000 on The Mehsana Urban Co-operative Bank Ltd., Gujarat by order dated July 03, 2024. The action followed a statutory inspection and a show-cause process under the Banking Regulation Act, 1949. RBI sustained charges that the bank had sanctioned or renewed multiple director-related credit facilities to entities in which directors or their relatives were interested, failed to implement prescribed cyber security controls, did not classify certain borrower accounts as NPAs, allotted multiple UCICs to many customers, and made a donation to a trust/institution in which a director was interested. RBI clarified that the penalty is based on regulatory deficiencies and does not determine the validity of any customer transaction or agreement.