Document title: RBI imposes monetary penalty on Nirmal Urban Co-operative Bank Ltd., Nagpur, Maharashtra
Issuing authority: Reserve Bank of India (RBI)
Reference number: Press Release: 2026-2027/597
Date: 02 July 2026
Banking and Credit
The RBI, by an order dated 30 June 2026, imposed a monetary penalty of ₹1 lakh (Rupees One Lakh only) on Nirmal Urban Co-operative Bank Ltd. (the bank) for non‑compliance with specific RBI directions concerning limits on exposure to single and group borrowers/parties, large exposures, and the revised target for priority sector lending for urban co‑operative banks (UCBs). The penalty is also linked to non‑adherence to operational instructions issued under the Supervisory Action Framework (SAF).
The statutory inspection that formed the basis of the penalty examined the bank’s financial position as of 31 March 2025. Following the inspection, RBI issued a notice to the bank requiring it to show cause why a penalty should not be imposed. The bank submitted a written reply, additional written submissions, and made oral submissions during a personal hearing. After evaluating these materials, RBI sustained the charges and imposed the penalty.
The specific breaches identified were: (i) failure to reduce the single borrower exposure limit for fresh loans and advances by 50% of the applicable regulatory limit in certain cases; and (ii) offering interest rates on certain deposits that were higher than those offered by the State Bank of India.
Regulatory and Policy Measures
The penalty is imposed under the powers conferred on RBI by Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. RBI clarified that the monetary penalty is imposed solely for deficiencies in regulatory compliance and does not constitute a judgment on the validity of any transaction or agreement entered into by the bank with its customers. The penalty is also without prejudice to any other action that RBI may initiate against the bank in the future.
The notice is signed by Brij Raj, Chief General Manager, RBI.
In conclusion, the RBI has exercised its supervisory authority to penalise Nirmal Urban Co-operative Bank Ltd. for specific regulatory breaches, emphasizing continued oversight and the possibility of further actions if compliance is not achieved.