Document title: RBI imposes monetary penalty on Manmad Urban Co-operative Bank Ltd.
Issuing authority: Reserve Bank of India
Reference number: Press Release: 2026-2027/716
Date: July 20, 2026
Banking and Credit
The RBI’s statutory inspection of Manmad Urban Co‑operative Bank Ltd., covering its financial position as on 31 March 2025, identified that the bank had sanctioned loans to a relative of one of its directors. This contravenes the RBI’s directions on “Loans and Advances to Directors, their Relatives, and Firms/Concerns in which they are Interested”, which prohibit such related‑party lending without proper compliance.
Regulatory and Policy Measures
Pursuant to the powers conferred under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949, the RBI issued an order dated 17 July 2026 imposing a monetary penalty of ₹1 lakh on the bank for the identified non‑compliance. The penalty follows a notice‑and‑show‑cause process in which the bank’s response was considered. The RBI clarified that the penalty is imposed without prejudice to any further action and does not adjudicate on the validity of the underlying transactions.
The RBI’s action underscores its strict enforcement of related‑party loan norms for cooperative banks, signalling continued regulatory vigilance and the possibility of additional measures if compliance gaps persist.