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The Rajula Nagrik Sahakari Bank Ltd., Rajula, Dist. Amreli, Gujarat

Co-operative bankRajula, Gujarat

The RBI action, regulatory basis, and operating impact linked to this entity.

Recorded RBI impact

Fine: Rs 1.25 L

Monetary penalty · Fresh imposition

S1

Published by RBI

21 Nov 2024

Case Brief

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.

Why RBI Acted

Lending normsCustomer protectionGovernance oversightReporting & disclosure

RBI imposed a monetary penalty after a statutory inspection (with reference to the bank’s financial position as on March 31, 2023) found non-compliance with directions on ‘Loans and Advances to directors, relatives and firms/concerns in which they are Interested’ and ‘Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks’. RBI stated that the bank sanctioned cash credit limits where relatives of directors stood as guarantors, and failed to classify certain accounts as inoperative/dormant where no customer-induced transaction occurred for over two years. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

Operating Impact

The bank must absorb the monetary penalty and address compliance gaps in related-party lending controls and deposit-account classification processes. The action does not itself impose an operating ban, but it signals heightened supervisory scrutiny and the possibility of further RBI action if deficiencies persist.

Regulatory Basis

  • section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949

Action Facts

Primary Impact
Fine: Rs 1.25 L
Order Date
13 Nov 2024
Effective From
13 Nov 2024
Entities Affected
1
Entity Role
Primary
Entity Type
Co-operative bank