The Reserve Bank of India has imposed a monetary penalty of Rs five lakh on the the Halol Mercantile Co-operative Bank Ltd., Halol Dist. Panchmahals (Gujarat) in exercise of the powers vested in it.
The UCB was faulted for violation pertaining to sanctioning unsecured loans despite operational restriction imposed on it under section 36(1) of Banking Regulation Act, 1949 (AACS).
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 and also personal submissions in the matter, RBI came to the conclusion that the violation was substantiated and warranted imposition of penalty.
