RBI penalizes Motiram Agrawal Jalna Merchants Co-op Bank for flouting rules
Cites provisions of Section 47A(1)(c) and Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for the action
By: : Suraj Sinha
Update: 2025-07-23 09:15 GMT
RBI penalizes Motiram Agrawal Jalna Merchants Co-op Bank for flouting rules
Cites provisions of Section 47A(1)(c) and Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 for the action
The Reserve Bank of India (RBI) has imposed Rs.6 lakh on Maharashtra’s Motiram Agrawal Jalna Merchants Co-operative Bank Ltd, for non-compliance with norms.
The bank ignored RBI’s directions on ‘Loans and advances to directors, relatives and firms/concerns in which they are interested’ and ‘Limits on exposure to single and group borrowers/parties and large exposures and revision in the target for priority sector lending - UCBs’.
This penalty is under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The RBI conducted an inquiry into the bank’s financial position as of 31 March 2024. Based on the findings, a notice was issued to it for failing to comply with the directions. After considering the bank's response, additional submissions were made during the personal hearing. However, the Central Bank noted that the bank sanctioned director-related loans and loans and advances to certain borrowers beyond the applicable group exposure limit. The charges warranted the imposition of a penalty.
The banking regulator clarified that the action was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. It added that the penalty was imposed without prejudice to any other action that may be initiated by the RBI against the Co-op bank.