The Reserve Bank of India has imposed a monetary penalty of on the Nasik Merchants’ Co-operative Bank, Maharashtra for violation of its instructions and guidelines.
Inspection of the bank with reference to its position as on March 31, 2012 revealed that the bank had persistently violated section 6(1) (j) of the banking Regulation Act 1949 (AACS) as it had set up a trust in the name and style of NAMCO Charitable Trust and the trust had seven Trustees who were also Directors of the bank.
The purpose of the trust was to run a medical college cum hospital for general public. Thus there was evidence of recurrence of violation of section 6(1) (j) of the Banking Regulation Act 1949 (AACS), RBI release read.
After serving show cause notice and Bank’s reply the Reserve Bank of India came to the conclusion that the violations were substantiated and classified as ‘Major’ which warranted imposition of penalty.