The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 14.25 lakh on Nagar Sahkari Bank Ltd., Maharajganj (Uttar Pradesh), for several violations of banking regulations related to asset classification, lending practices, credit reporting, and risk management.
The penalty, imposed through an order dated May 26, 2026, follows RBI’s statutory inspection of the bank with reference to its financial position as of March 31, 2025.
The central bank found that the cooperative bank had failed to correctly classify and identify certain non-performing assets (NPAs), resulting in regulatory non-compliance.
RBI also observed that the bank breached prescribed limits on unsecured advances, failed to upload borrower data to Credit Information Companies (CICs), and did not exercise adequate caution while sanctioning certain loans.
After reviewing the bank’s written response and oral submissions during a personal hearing, RBI concluded that the violations warranted monetary action.
The regulator clarified that the penalty is based solely on compliance deficiencies and does not affect the validity of transactions entered into by the bank with its customers. Further regulatory action, if required, may be taken separately.
