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The Reserve Bank of India (RBI) imposed a monetary penalty of ₹5.00 lakh on Shri Mahila Sewa Sahakari Bank Ltd., Ahmedabad (Gujarat) on December 21, 2022, for contravention of multiple RBI directions concerning statutory reserves, loans to directors and related parties, dividend declaration, and the Depositor Education and Awareness Fund Scheme, 2014. The penalty was imposed under Sections 47A (1)(c), 46(4)(i), and 56 of the Banking Regulation Act, 1949.
A special scrutiny and statutory inspection of the bank, based on its financial position as of March 31, 2019, revealed that the bank had not maintained the minimum Cash Reserve Ratio (CRR), sanctioned loans where directors or their relatives were guarantors, declared dividends without prior RBI approval despite CRR defaults, and failed to transfer unclaimed balances to the Depositor Education and Awareness Fund, booking part of it as income.
After considering the bank’s reply and oral submissions during the personal hearing, RBI concluded that the charges were substantiated and warranted the imposition of the monetary penalty.
[RBI]