RBI slaps Rs 5 lakh penalty on Solapur District Central Co-op Bank

The Reserve Bank of India has imposed Rs 5 lakh penalty on the Solapur District Central Co-operative Bank. The penalty has been imposed on the bank for violating the provisions of the Banking Regulation Act (As Applicable to Co-operative Societies), as it had granted unsecured loans to companies in which the directors of the board had interest and not reporting the transactions in the relevant monthly statement after sanctioning the loans, the RBI said in a statement.

The central bank had issued a show-cause notice to the co-operative bank in response to which the latter submitted a written reply. After considering the facts of the case, the 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.