The Reserve Bank of India has imposed a monetary penalty of Rs one lakh on the Madanapalle Co-operative Town Bank Ltd., Madanapalle, Chittoor District, Andhra Pradesh, in exercise of the powers vested in it.
The UCB was faulted for violation of Section 20 and Section 20 A of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) and directives and guidelines of the Reserve Bank on loans and advances to directors and their relatives.
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, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of penalty.
