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RBI penalises Nasik Merchants’ Co-op Bank

RBI imposes a penalty of Rs. 5 lakh on the bank

July 18, 2013 11:21 IST | India Infoline News Service
The Reserve Bank of India on Wednesday imposed a penalty of Rs. 5 lakh on Nasik Merchants’ Co-operative Bank Ltd in Nasik, Maharashtra for violation of RBI guidelines.

Inspection of the bank on March 31, 2012 revealed that the bank had persistently violated section 6(1) (j) of the Banking Regulation Act 1949 (AACS) as it had set up a trust in the name and style of NAMCO Charitable Trust and the trust had seven Trustees who were also Directors of the bank and the purpose of the trust was to run a medical college cum hospital for general public. Thus there was evidence of recurrence of violation of section 6(1) (j) of the Banking Regulation Act 1949 (AACS)

The RBI 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 bank’s reply in the matter, RBI came to the conclusion that the violations were substantiated and classified as ‘Major’ which warranted imposition of penalty.

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