RBI imposes penalty on Mahatma Basaveshwar Cooperative Bank

Bangalore, July 25 (UNI) The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs five lakh on Mahatma Basaveshwar Cooperative Bank at Afzalpur for violation of its directives and guidelines.

A statement from the RBI today said it had been observed inter alia that the Cooperative Bank had extended credit facilities to the directors and their relatives after September three, 2003 in violation of the directives and had not followed KYC guidelines.

The RBI had issued a show cause notice to the bank in response to which the bank submitted a written explanation.

Based on the reply from the bank, the RBI came to the conclusion that it had violated the guidelines and warranted imposition of penalty.

UNI