Huge fine on Mehsana Urban Co-op Bank

The Reserve Bank of India has imposed a monetary penalty of Rs one crore on the Mehsana Urban Co-operative Bank based in Mehsana (Gujarat), in exercise of the powers vested in it.

The UCB was found guilty of violation of RBI directives relating to grant of advances to directors and their relatives.

Besides the urban co-op bank was also lax on the issue of Know Your Customer (KYC) and Anti Money Laundering (AML) norms, group exposure norms, etc, read a press release from the regulator.

The Reserve Bank of India had issued a show cause notice to the bank, in response to which the bank submitted a written reply.

After considering the facts of the case and the bank’s reply in the matter and the oral submissions made in the personal hearing, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of penalty.

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