RBI Imposes Heavy Monetary Penalty on Nashik Bank for Noncompliance in Director Loans
Reserve Bank Levies ₹2 Lakh Fine on Nasik Road Deolali Vyapari Sahakari Bank Ltd.
The Reserve Bank of India (RBI) has imposed a significant monetary penalty on The Nasik Road Deolali Vyapari Sahakari Bank Ltd., Nashik. This action stems from the bank's noncompliance with specific directions issued by the RBI concerning lending practices to directors and their associated firms.The penalty, finalized in an order dated June 12, 2026, amounts to ₹ 2,10,000/- (Rupees Two Lakh Ten Thousand only). The imposition is made under the powers conferred upon the RBI by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Basis of RBI’s Supervisory Findings
The penalty was levied following a statutory inspection conducted by the RBI concerning the bank's financial position as recorded on March 31, 2025. Based on supervisory findings, a notice was first issued to the bank, demanding clarification regarding the failure to adhere to the stipulated regulatory directions.After reviewing the bank’s response and considering oral submissions during a personal hearing, the RBI found specific charges against the institution to be true. The core violation identified centered on the sanctioning of loans by the bank to the relatives of its directors.
Regulatory Compliance and Penalties
The decision highlights deficiencies in regulatory compliance within the banking sector. It is important to note that this monetary penalty, while substantial, is intended solely based on noncompliance with RBI directions.The RBI clarified that the imposition of this fine does not intend to challenge the validity of any transaction or agreement previously entered into by the bank with its customers. Furthermore, the penalty issuance stands without prejudice to any other actions the RBI might initiate against the bank.
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