Case Brief
What Happened
RBI, by order dated November 13, 2024, imposed a monetary penalty of ₹1.25 lakh on The Rajula Nagrik Sahakari Bank Ltd., Rajula, Dist. Amreli, Gujarat. The penalty followed a statutory inspection as of March 31, 2023 and was based on supervisory findings of non-compliance with RBI directions on loans and advances to directors, relatives, and firms/concerns in which they are interested, as well as maintenance of deposit accounts for primary (urban) co-operative banks. RBI found that the bank had sanctioned cash credit limits where relatives of directors acted as guarantors and had failed to classify certain accounts as inoperative/dormant despite no customer-induced transactions for more than two years. RBI clarified that the action is based on regulatory deficiencies and does not pronounce on the validity of any transaction or agreement.