A recent press report said that the Reserve Bank of India has imposed a monetary penalty of Rs.5.00 lakh (Rupees five lakh only) on the Jagruti Co-operative Bank Limited, Belgaum, Karnataka, in exercise of powers vested in it under the provisions of Section 47A(1)(b) read with Section 46(4) of the Banking Regulation Act, 1949 (AACS) for violating the Reserve Bank of India’s instructions by sanctioning loans to present directors, their relatives and firms / concerns in which they are interested and suppressing such information by not reporting it in the relevant quarterly statement proforma I & II submitted to the Reserve Bank of India.
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, bank’s reply and personal submissions in the matter, the Reserve Bank came to the conclusion that the violations were substantiated and warranted imposition of the penalty.
The banks are already facing the heat of the hike in the base rates by the regulator which has lead to the slowdown in their loan business. The hike in base rates has made it mandatory for all banks to increase their loan rates (home loan, personal loan, business loans, vehicle loan etc.)