Summary of this article
RBI fines total Rs 11.9 lakh across four entities
Three cooperative banks penalised for lending and exposure breaches
One Mumbai NBFC fined for loan transfer violations
The Reserve Bank of India (RBI) has imposed monetary penalties amounting to Rs 11.9 lakh on three cooperative banks and one non-banking financial company (NBFC) for not adhering to directions issued by the apex bank. All four penalties were imposed through separate orders dated January 20, 2026, after inspections with reference to the financial position of the entities as on March 31, 2025.
The central bank clarified that these actions are based on deficiencies in regulatory compliance and do not reflect on the validity of transactions entered into by the entities with their customers.
Penalty On Shri Kanyaka Nagari Sahakari Bank
Out of the four entities, the highest penalty was imposed on Shri Kanyaka Nagari Sahakari Bank, Chandrapur, Maharashtra. The bank was penalised Rs 8 lakh for non-compliance with RBI guidelines on giving advances to builders and contractors.
As per the RBI, it was found during the statutory inspection that the bank had sanctioned loans to builders or contractors, which were partly used for the purchase of land. This is not allowed according to the RBI’s regulatory requirements.
On the basis of the supervisory observations, the bank received a show-cause notice. After taking into consideration the response and further submissions, RBI held that the charge was justified, thereby requiring the imposition of a monetary penalty.
Penalty On Sri Satya Sai Nagrik Sahakari Bank
A penalty of Rs 1 lakh was imposed on Sri Satya Sai Nagrik Sahakari Bank, Bhopal, Madhya Pradesh, for violating the prudential exposure limits.
The inspection revealed that the bank had violated the prescribed inter-bank gross exposure limits as well as the counterparty exposure limits. The limits are meant to ensure that there is no concentration of risk and that the interests of the depositors are protected.
RBI gave a notice to the bank asking for reasons why a penalty should not be imposed on the bank. After considering the bank’s written response, further submissions, and oral submissions made during a personal hearing, RBI held that the violation had been established.
Penalty On Pimpri Chinchwad Sahak
A monetary penalty of Rs 2.10 lakh was imposed on Pimpri Chinchwad Sahakari Bank, Pimpri, Maharashtra, for not adhering to the directions on exposure norms and statutory restrictions.
The central bank found that Sahakari Bank was exceeding the stipulated limit on unsecured loans. Such unsecured lending above certain levels can pose a credit risk, especially for a cooperative bank with a geographically localised depositor base.
After the inspection, RBI issued a show-cause notice to the bank. After reviewing the bank’s response, the charge was upheld and a fine was imposed.
Penalty On VSJ Investments
RBI has also imposed a penalty of Rs 80,000 on VSJ Investments, an NBFC, for contravening directions on the transfer of loan exposures.
The regulator’s analysis of documents and the assignment agreement executed by the company with an unregulated entity revealed that the company had acquired a loan from an ineligible entity. This violated RBI guidelines applicable to such transactions.
After the issuance of the show cause notice and taking into consideration the response of the company as well as the oral arguments made by the company during the personal hearing, RBI decided that the default required a monetary penalty.
Regulatory Framework
According to RBI, the penalties have been imposed on these entities under the applicable provisions of the Banking Regulation Act, 1949, and the Reserve Bank of India Act, 1934. RBI has also made it clear that the imposition of these penalties will not affect any other regulatory action that may be initiated in the future.
