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RBI penalizes Ernakulam District Co-op Bank

Ernakulam District Co-op Bank had violated the Banking Regulation Act, 1949 applicable to Co-operative Societies

August 02, 2012 2:59 IST | India Infoline News Service
The Reserve Bank of India (RBI) has imposed a penalty of Rs. 5 lakh on Ernakulam District Co-operative Bank Ltd, Ernakulam (Kerala) for violation of rules.

Ernakulam District Co-op Bank had violated the Banking Regulation Act, 1949 applicable to Co-operative Societies by granting unsecured loans to Mithra Agricultural Produce Committee (MAPC).

The RBI had issued a show cause notice to the bank, in response to which the bank submitted a written reply. Based on the reply, the Reserve Bank of India came to the conclusion that the violation was substantiated and warranted imposition of the penalty.

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