RBI fines Bombay Mercantile Rs 5 lakh

The Reserve Bank of India has imposed a penalty of Rs 5 lakh on Bombay Mercantile Co-operative Bank, Mumbai, for violation of instructions and guidelines of the RBI. The bank had violated the group exposure norms prescribed by the RBI by sanctioning 21 loans aggregating Rs 96.20 crore to Shah group of companies between November 17, 2008 and July 18, 2009, as against permitted ceiling of Rs 14.11 crore, the RBI said. The RBI 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 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.