Mumbai, Aug 10 (PTI) The RBI on Tuesday said it has imposed a penalty of Rs 10 lakh on Gadhinglaj Urban Co-operative Bank Limited, Gadhinglaj, Maharashtra, for contravention of certain norms.

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Inspection report of the bank based on its financial position as on March 31, 2019, revealed, inter alia, that the lender had advanced loan to a director of the bank and given fresh loans to the real estate sector in violation of the operational instructions issued by the RBI, it said.

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The cooperative bank had also extended individual unsecured advances of more than Rs 5 lakh and not implemented the system of periodic review of risk categorisation of accounts, the RBI said.

A notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

"After considering the bank's reply to the Notice, and oral submissions made during the personal hearing, the RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty," the RBI said in the statement.

In a separate statement, the RBI said it has also imposed a penalty of Rs 2 lakh each on Maharashtra-based Malkapur Urban Cooperative Bank Limited, Malkapur, and Dr Babasaheb Ambedkar Urban Co-operative Bank Limited, Nagpur, for contravention of certain norms.

In all the three cases, RBI said the penalties were based on deficiencies in regulatory compliance and "is not intended" to pronounce upon the validity of any transaction or agreement entered into by them with customers.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)