The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2 lakh on Prathamik Shikshak Sahakari Bank Ltd., Satara, Maharashtra, for non-compliance with regulatory guidelines.
The penalty was levied through an order dated May 20, 2025, under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
The action follows a statutory inspection of the bank’s financial position as of March 31, 2024, which revealed that the Salary Earners’ Primary (Urban) Co-operative Bank had extended advances against term deposits and sanctioned gold loans to non-members, despite not meeting the Financially Sound and Well Managed (FSWM) criteria prescribed by RBI. These actions are in violation of the RBI’s directions applicable to such co-operative banks.
A show-cause notice was issued, and after reviewing the bank’s response and oral submissions, the RBI concluded that the charges were substantiated.
The central bank clarified that the penalty pertains to regulatory compliance failures and does not affect the validity of the bank’s agreements with customers. It also does not preclude further action by RBI if deemed necessary.
