The Reserve Bank of India has imposed a monetary penalty of Rs five lakh on the Mehsana District Central Cooperative Bank Ltd., Mehsana (Gujarat) in exercise of the powers vested in it.
The UCB was faulted for violation of the provisions of Section 22(3)(b) of the B.R.Act, 1949 (AACS) relating to “the affairs of the co-operative bank are not being, or are not likely to be, conducted in a manner detrimental to the interest of its present or future depositors”.
It was also found violating the directives and guidelines of the Reserve Bank on prudential accounting norms related to provisioning against Non Performing Investments as advised.
The Reserve Bank of India had issued a show cause notice to the bank based on the findings of inspection conducted by NABARD for the financial position as on 31.03.2014, in response to which the bank submitted a written reply and made personal submissions to the Regional Director, Reserve Bank of India, Ahmedabad.
After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of penalty.