The Reserve Bank of India has imposed a monetary penalty of Rs one lakh on Swasakthi Mercantile Co-operative Urban Bank Ltd., Vijayawada, Krishna District, Andhra Pradesh, in exercise of the powers vested in it.
The urban cooperative bank was found violating Section 20 of the Banking Regulation Act, 1949 (AACS) 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.