Vadnagar Nagarik Sahakari Bank Ltd., Vadnagar, Gujarat

Following a statutory inspection with reference to the bank’s financial position as on March 31, 2022, RBI examined the Inspection Report, Risk Assessment Report and related correspondence and found two contraventions: (i) a loan was sanctioned where a relative of one of the bank’s directors stood as guarantor, contrary to RBI directions on loans and advances to directors/relatives and related guarantees; and (ii) the bank did not pay interest on matured term deposits from the date of maturity until repayment at the applicable rate, contrary to RBI directions on interest rate on deposits. After considering the bank’s reply and oral submissions, RBI 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 penalty and address the compliance gaps identified by RBI, especially around director-linked lending and timely interest payment on matured deposits. No operating restriction or licence impact was imposed, but the findings may attract closer supervisory scrutiny going forward.