The Reserve Bank of India (RBI) has slapped a fine of ₹16.30 lakh on Shree Kadi Nagarik Sahakari Bank Ltd., based in Mehsana, Gujarat. This penalty was imposed on May 6, 2026, due to the bank’s failure to adhere to critical regulatory norms.
According to RBI officials, the bank violated guidelines related to exposure norms and management of advances for urban cooperative banks (UCBs). Specific issues included breaching prudential exposure limits tied to a group of interconnected borrowers and not ensuring proper end-use of certain sanctioned loans.
This action stemmed from a statutory inspection that analyzed the bank’s financial standing as of March 31, 2025. Following this review, RBI identified several irregularities. The bank was subsequently notified and given an opportunity for response during a personal hearing.
Despite the bank’s defense, RBI concluded that the violations were serious enough to warrant a monetary penalty. The fine is rooted in provisions from the Banking Regulation Act of 1949 — specifically Section 47A(1)(c) and Sections 46(4)(i) and 56.
In its clarification following the imposition of the fine, RBI noted that this penalty focuses solely on compliance deficiencies and does not call into question any customer transactions. Furthermore, it indicated that additional actions could be taken if deemed necessary in the future.