The Varachha Co-operative Bank Ltd

RBI imposed a ₹1 lakh penalty on The Varachha Co-operative Bank Ltd., Surat. The bank breached RBI directions by sanctioning credit facilities where a director’s relative served as surety/guarantor.

The bank must bear the penalty and ensure future lending and guarantee arrangements comply with RBI’s directions on director-related exposures. The action does not invalidate customer transactions, but it signals regulatory non-compliance and may prompt tighter internal controls over related-party lending and guarantees.

• Section 47 A (1) (c)
• Sections 46 (4) (i)
• Section 56 of the Banking Regulation Act, 1949

RBI has imposed a monetary penalty of Rs 1 lakh on The Varachha Co-operative Bank Ltd., Surat. The penalty was for failing to transfer long-unclaimed account balances to the Depositor Education and Awareness Fund.

The bank must absorb the monetary penalty; the release does not describe any operational restriction or licence impact. The underlying compliance issue concerns treatment of dormant/unclaimed balances and depositor-protection obligations.

• sub-section (2) of section 26A of the Banking Regulation Act, 1949
• paragraph 3 of The Depositor Education and Awareness Fund Scheme, 2014
• Section 47A(1)(c) read with Section 46(4)(i) and Section 56 of the Banking Regulation Act, 1949