RBI imposes monetary penalty on Vita Merchants’ Co-operative Bank Ltd., Vita, Maharashtra

Case Brief

The Reserve Bank of India imposed a monetary penalty on Vita Merchants’ Co-operative Bank Ltd., Vita, Maharashtra, by order dated February 13, 2026. RBI said the bank had not complied with directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Fair Lending Practice - Penal Charges in Loan Accounts’. After inspection, show-cause notice, reply, and oral hearing, RBI sustained two charges: the bank sanctioned loans to certain nominal members beyond the prescribed regulatory limit, and it did not communicate the levy of penal charges and the reasons for those charges to certain borrowers. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.