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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹2 lakh on Pragati Mahila Nagrik Sahakari Bank Maryadit, Bhilai, Chhattisgarh, for non-compliance with directions issued to Urban Co-operative Banks regarding loans and advances to directors, directors as sureties/guarantors, and Know Your Customer (KYC) norms. The penalty has been imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The inspection of the bank, based on its financial position as of March 31, 2020, revealed that the bank had granted loans based on guarantees provided by relatives of directors and had not carried out periodic KYC updates as per the prescribed schedule. These actions were in contravention of RBI directions.
Following the findings, RBI issued a show-cause notice to the bank. After reviewing the bank’s written responses and oral submissions during the personal hearing, RBI concluded that the non-compliance was substantiated and warranted the imposition of the monetary penalty.
[RBI]