The Reserve Bank of India has imposed a monetary penalty of Rs five lac on Purvanchal Co-operative Bank Ltd., Ghazipur (U.P.) in exercise of powers vested in it. The UCB was found guilty of violation of RBI Instructions on Finance for Housing Schemes.
It was guilty of extending loans and advances to Directors, their relatives and concerns, in which they are interested.
The Bank was also found guilty of exceeding maximum limit on unsecured advances, Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs and Exceeding individual and single exposure ceiling for lending operations.
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, the bank’s reply in the matter and personal hearing, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of penalty.