Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of Rs 2 lakh on The Lunawada People’s Co-operative Bank Ltd., Dist. Mahisagar, Gujarat, by order dated May 22, 2026. The action followed a statutory inspection and supervisory findings that the bank had not complied with RBI directions on loans and advances to directors, their relatives, and firms/concerns in which they are interested. RBI concluded that the bank sanctioned loans where relatives of its directors were guarantors, and imposed the penalty after issuing a show-cause notice and considering the bank’s reply and oral submissions.