RBI Imposes ₹11.90 Lakh Penalty on Cooperative Banks, NBFC for Regulatory Lapses
The Reserve Bank of India imposed ₹11.90 lakh in penalties on three cooperative banks and one NBFC for regulatory non-compliance, citing violations in lending norms, exposure limits, and loan transfer rules following statutory inspections.
The Reserve Bank of India (RBI) has imposed cumulative monetary penalties amounting to ₹11.90 lakh on three cooperative banks and one NBFC for regulatory non-compliance.
The highest penalty of ₹8 lakh has been imposed on Maharashtra-based Shri Kanyaka Nagari Sahakari Bank Limited for violating RBI directions related to lending norms.
According to official RBI disclosures, the penalties were imposed following statutory inspections that identified deficiencies in regulatory compliance across multiple prudential and operational parameters.
The penalised entities include Pimpri Chinchwad Sahakari Bank Maryadit from Maharashtra, Sri Satya Sai Nagrik Sahakari Bank Maryadit from Madhya Pradesh, and VSJ Investments Private Limited.
RBI stated that the enforcement actions were initiated under powers conferred by the Banking Regulation Act and the Reserve Bank of India Act.
Regulatory Action Highlights Lending and Exposure Norm Violations
Shri Kanyaka Nagari Sahakari Bank Limited was found non-compliant with RBI directions governing advances to builders and contractors during statutory inspection.
The inspection revealed that the bank sanctioned loans to builders or contractors, which were partly utilised for land acquisition, violating specific RBI lending restrictions.
Such lending practices are restricted to prevent excessive exposure to speculative real estate activities and to safeguard depositor interests.
The ₹8 lakh penalty reflects the seriousness of deviations observed during RBI’s supervisory assessment of the bank’s credit portfolio.
Pimpri Chinchwad Sahakari Bank Maryadit faced a penalty of ₹2.10 lakh for breaching RBI exposure norms and statutory restrictions.
The cooperative bank exceeded the prescribed limits on unsecured advances, increasing its risk profile contrary to prudential banking guidelines.
RBI inspections highlighted that adherence to exposure ceilings remains a critical area of concern for cooperative banks nationwide.
Inter-Bank Exposure Breaches and NBFC Compliance Issues
Sri Satya Sai Nagrik Sahakari Bank Maryadit was found to have breached prudential inter-bank gross exposure and counterparty exposure limits.
Following the inspection findings, RBI imposed a monetary penalty of ₹1 lakh on the Madhya Pradesh-based cooperative bank.
Inter-bank exposure limits are designed to reduce systemic risk and prevent contagion during periods of financial stress.
In a separate action, RBI imposed a penalty of ₹80,000 on Mumbai-based NBFC VSJ Investments Private Limited.
The NBFC was found non-compliant with RBI directions governing transfer of loan exposures between financial entities.
VSJ Investments had acquired a loan exposure from an entity not eligible to undertake such a transaction under prevailing regulations.
RBI noted that NBFCs must strictly follow eligibility norms to ensure transparency and stability in the secondary loan market.
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RBI Clarifies Scope of Penalties and Supervisory Intent
The central bank clarified that the penalties were imposed due to deficiencies in regulatory compliance and supervisory concerns.
RBI emphasised that these actions do not reflect on the validity of any specific transaction or agreement entered with customers.
Such clarifications aim to prevent misinterpretation of enforcement actions as judgements on customer-level contractual disputes.
According to regulatory experts, these penalties underscore RBI’s continued focus on strengthening compliance culture within cooperative banks and NBFCs.
The cooperative banking sector has faced increased regulatory scrutiny amid concerns over governance standards and risk management practices.
Sprouts News Special Investigation Team notes that consistent enforcement actions signal RBI’s intent to enforce discipline across regulated entities.
Industry observers believe sustained supervision and corrective measures are essential to protect depositors and maintain financial system stability.
The RBI continues to urge regulated entities to strengthen internal controls, comply with prudential norms, and ensure transparent lending practices.
These penalties serve as a reminder that regulatory compliance remains non-negotiable across India’s evolving financial landscape.
