Banking regulator Reserve Bank of India has imposed a fine worth Rs 5 lakh on Bombay Mercantile Cooperative Bank. The bank has been penalised on grounds of violation of RBI rules and guidelines.
RBI has cited that the bank violated directives on group exposure by sanctioning 21 loans to Shah group of companies. The total loan amount disbursed to Shah group stands at Rs 96.20 crore in a period between November 17, 2008 and July 18, 2009.
The maximum amount of loan permitted in this regard is Rs 14.11 crore.
"After considering the facts of the case and the bank's reply in the matter, the RBI came to the conclusion that the violations were substantiated and warranted imposition of the penalty," the RBI said.