Nirmal Urban Co-operative Bank Ltd., Nagpur, Maharashtra

Following a statutory inspection with reference to the bank’s financial position as on March 31, 2025, RBI issued a show-cause notice based on supervisory findings of non-compliance with its directions on limits on exposure to single and group borrowers/parties, large exposures, revision in the target for priority sector lending for UCBs, and operational instructions under the Supervisory Action Framework (SAF). After considering the bank’s reply, additional submissions, and oral submissions, RBI sustained charges that the bank had not reduced the single-borrower exposure limit for fresh loans and advances by 50% of the applicable regulatory limit in certain cases, and had offered interest rates on certain deposits higher than those offered by State Bank of India. RBI imposed the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

The bank must absorb the monetary penalty and continue complying with RBI’s exposure-limit, priority-sector lending, and SAF-related instructions. The order does not itself restrict operations, but it signals supervisory non-compliance and leaves the bank open to any further action RBI may initiate.