Shihori Nagarik Sahakari Bank Ltd., Shihori, Dist. Banaskantha, Gujarat

RBI imposed a monetary penalty under Section 47-A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after its inspection found that the bank had sanctioned loans where relatives of directors stood as guarantors and had breached the prescribed inter-bank counterparty exposure limit. The action was taken for non-compliance with RBI directions on loans and advances to directors, relatives and firms/concerns in which they are interested, clarification on directors acting as sureties/guarantors, and placement of deposits with other banks by Primary (Urban) Co-operative Banks.

The bank must absorb the monetary penalty and address the compliance deficiencies identified by RBI, particularly around related-party lending and counterparty exposure controls. The release does not state any business restriction or license action, so operations continue, but the bank remains exposed to supervisory scrutiny over these control lapses.