The Reserve Bank of India has imposed a monetary penalty of Rs. 5.00 lakh (Rupees Five Lakh only) on The Amravati Zilla Mahila Sahakari Bank Ltd., Amravati, 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 (As Applicable to Co-operative Societies) for violation of the guidelines issued by Reserve Bank of India on diversion of funds.

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 and the bank’s reply in the matter, the Reserve Bank came to the conclusion that the violation was substantiated and warranted imposition of the penalty.

Ajit Prasad

Assistant General Manager

Diversion of funds violation prompts regulatory monetary penalty under banking law after show-cause process concluded. Monetary penalty imposed under statutory powers for violation of guidelines on diversion of funds by a cooperative bank. A show cause notice was issued, the bank submitted a written reply, and after considering the facts and response the regulator concluded the violation was substantiated and imposed a monetary penalty under the Banking Regulation Act (as applicable to co-operative societies).