RBI imposes Rs 5 lakh penalty on Karad Urban Co-op Bank

The Reserve Bank has imposed a penalty of Rs 5 lakh on Maharashtra-based Karad Urban Co-operative Bank for violating guidelines on shifting of branch without the regulator's prior approval. 

"The bank had violated RBI instructions...which involved change in municipal ward number 35 to 50, for which no prior permission was obtained from RBI," the central bank said in a circular. 

According to RBI guidelines, urban co-operative banks are required to obtain prior permission from it for shifting to a different locality or municipal ward. 

The bank has been penalised for shifting its location in Sangli, Maharashtra without RBI permission, the circular said. 

RBI had issued a show-cause notice to the bank, in response to which the bank submitted a written reply. 

"After considering facts in the case and the bank's reply in the matter, the RBI came to the conclusion that the violation was substantiated and warranted imposition of the penalty," RBI said. (PTI)