The Reserve Bank of India has imposed a monetary penalty of Rupees five lakh on Nagar Urban Co-operative Bank Ltd., Ahmednagar, Maharashtra for violation of RBI guidelines.
The Nagar Urban Cooperative bank violated RBI’s directives on loans and advances to directors, by purchasing cheques beyond Rs 0.50 lakh pertaining to relatives of a director.
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 submissions made in the personal hearing, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of the penalty.