On August 21, the Reserve Bank of India (RBI) stated that it has imposed a monetary penalty of Rs 3 lakh on Devika Urban Co-operative Bank for rule violations.
In a press release, the RBI stated that, “the bank had renewed cash credit facility granted to a sole proprietorship concern whose proprietor was the wife of the director’s brother.”
The RBI asked the bank why it should not be penalized for its failure of complying with the guidelines.
According to the press release, “After considering the bank’s reply to the notice, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.”
It stated that in exercise of powers vested in RBI, this penalty has been imposed under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949.
