The Lasalgaon Merchants Co-operative Bank Ltd., Nashik, Maharashtra

Following a statutory inspection with reference to the bank’s financial position as on March 31, 2024, RBI issued a show-cause notice based on supervisory findings of non-compliance with RBI directions and related correspondence. After considering the bank’s reply and oral submissions, RBI sustained the charge that the bank had sanctioned additional credit facilities to certain borrowers for repaying their existing loans, in contravention of RBI directions on Income Recognition, Asset Classification, Provisioning and Other Related Matters - UCBs, and imposed a monetary 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; the release does not indicate any operational restriction, but it signals supervisory non-compliance that may support further RBI action. The action is against the bank itself, with no direct deadline stated.