RBI Imposes ₹1 Lakh Penalty on Co-operative Bank in Gujarat

Mumbai: The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on Shri Baria Nagarik Sahakari Bank Ltd., Baria, for non-compliance with certain directions issued by RBI on ‘Inspection & Audit Systems in Primary (Urban) Co-operative Banks’.

This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, the RBI said.

The statutory inspection of the bank was conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why a penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank’s reply to the notice and oral submissions made during the personal hearing, RBI found, inter alia, that the following charge against the bank was sustained, warranting the imposition of a monetary penalty:

The bank had failed to conduct an internal audit during the period from April 1, 2023, to March 31, 2025.

This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, the imposition of this monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank. DeshGujarat