RBI imposes monetary penalty on Nagar Sahakari Bank Ltd., Gorakhpur

Case Brief

RBI imposed a monetary penalty of ₹1.00 lakh on Nagar Sahakari Bank Ltd., Gorakhpur by order dated March 31, 2024. The action followed a statutory inspection with reference to the bank’s financial position as on March 31, 2022, and a show-cause notice issued for failure to comply with RBI directions under the Supervisory Action Framework (SAF) for Primary (Urban) Co-operative Banks. After considering the bank’s reply and oral submissions, RBI sustained the charge that the bank had offered higher interest rates on term deposits than those offered by State Bank of India, in contravention of specific directions issued under SAF. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.