RBI imposes monetary penalty on The Vadali Nagarik Sahakari Bank Ltd., Dist. Sabarkantha, Gujarat

Case Brief

By an order dated January 28, 2025, RBI imposed a monetary penalty of Rs 2.00 lakh on The Vadali Nagarik Sahakari Bank Ltd., Dist. Sabarkantha, Gujarat. The penalty followed a statutory inspection with reference to the bank's financial position as on March 31, 2023, and related supervisory findings showing non-compliance with RBI directions on loans and advances to directors/relatives, placement of deposits with other banks by primary (urban) co-operative banks, and KYC. RBI cited specific breaches including a loan sanctioned where a director's relative was a guarantor, non-adherence to prudential inter-bank and counterparty exposure limits, and failure to periodically review risk categorisation of certain accounts. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.