RBI penalises Vishvesvaraya Co-operative Bank

The Reserve Bank of India (RBI) on Tuesday imposed penalty on Bengaluru-based co-operative bank, Sir M Vishvesvaraya Co-operative Bank Ltd, for violation of various guidelines. The RBI slapped a penalty of Rs 5 lakh on the co-operative bank for violation of Section 47 A (1) (C) read with Section 46 (4) of the Banking Regulation Act, 1949 for granting housing loans of more than Rs 70 lakh.

"The Reserve Bank of India in exercise of the powers vested in it under the provisions of the said Act for granting housing loans of more than Rs 70 lakh per beneficiary violating directives," the apex bank said in a statement.

As per the rules, Tier-I urban co-operative banks (UCBs) are expected to extend individual housing loans up to a maximum of Rs 30 lakh per beneficiary of a dwelling unit and Tier II UCBs to extend individual housing loans up to a maximum of Rs 70 lakh per beneficiary of a dwelling unit subject to extant prudential exposure limits. 

The apex bank also said that the M Vishvesvaraya Co-operative Bank had been extending donation to a Trust where a Director of the bank was an Administrator violating RBI rules.

Established in 1979, the co-operative bank had deposits worth Rs 2,021 crore at the end of fiscal year 2017-18.

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RBI penalises Vishvesvaraya Co-operative Bank

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