The Reserve Bank of India (RBI) announced on May 14 that it has fined The Vaijapur Merchants Co-operative Bank Rs 2.50 lakh for breaching regulations.
The penalty was imposed due to the bank’s failure to comply with specific directives issued by the RBI under the Supervisory Action Framework (SAF), according to a press release from the central bank.
The RBI stated that it conducted a statutory inspection of the bank based on its financial position as of March 31, 2022. Following supervisory findings of non-compliance with RBI directives and related correspondence, the bank was issued a notice to justify why a penalty should not be levied.
According to the RBI, it was discovered that the bank had sanctioned a new hypothecation loan exceeding the revised exposure limit in violation of specific directives issued under the Supervisory Action Framework (SAF). This led to the imposition of the monetary penalty.
