The Reserve Bank of India has imposed a monetary penalty of `5.00 lakh (Rupees five Lakh only) on The Town Co-operative Bank Ltd., Hoskote, Karnataka, 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) for acquiring and using non-banking asset in violation of Sections 6 and 9 of the Banking Regulation Act, 1949 (As Applicable to Co-operative Societies), for violation of Reserve Bank's directives on loans and advances to directors, their relatives and firms / concerns in which the directors are interested, contained in Reserve Bank Circular UBD.BPD.Cir.50/13.05.00/2002-03 dated April 29, 2003 and Directive UBD.BPD.Dir.5/13.05.00/2002-03 dated April 29, 2003 read with Circular UBD.No.BPD.CIR.54/13.05.00/2002-03 dated June 24, 2003 and declaring and paying dividend in violation of Reserve Bank's instructions contained in RBI Circular UBD.CO.BDP.(PCB) Cir.No.70/12.05.001/2008-09 dated June 15, 2009.

The Reserve Bank of India 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 as also personal submission in the matter, the Reserve Bank came to the conclusion that the violation was substantiated and warranted imposition of the penalty.

Ajit Prasad
Assistant General Manager

Press Release : 2012-2013/914