Ahmedabad: The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹25 lakh on The Mehsana Urban Co-operative Bank Limited, for non-compliance with specific regulatory directions related to ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs’.

According to an official RBI release, the penalty was imposed by an order dated October 28, 2025, under the powers conferred by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

The action follows a statutory inspection of the bank conducted by the RBI, assessing its financial position as on March 31, 2024. The inspection and subsequent supervisory review revealed non-compliance with certain RBI directives. Following this, the central bank issued a show-cause notice to Mehsana Urban Co-operative Bank, asking why a penalty should not be levied for the violations.

After examining the bank’s written and oral submissions, the RBI determined that the charge against the bank was valid — specifically, that the bank had failed to classify credit facilities of certain borrowers as non-performing assets (NPAs) in accordance with regulatory norms.

The RBI clarified that the penalty pertains to deficiencies in regulatory compliance and does not affect the validity of any transactions or agreements between the bank and its customers. The central bank further noted that the imposition of the penalty is without prejudice to any other regulatory or supervisory action that may be taken against the bank in the future. DeshGujarat