The Reserve Bank of India has, imposed a monetary penalty of Rs.1.00 lakh (Rupees One Lakh only) on the Kokan Mercantile Co-operative Bank Ltd., Mumbai, Maharashtra, for violating RBI directive on limits on credit exposure to single borrower/group of borrowers. The penalty was imposed 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).

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