Recorded RBI impact
Fine: Rs 3.10 L
Monetary penalty · Fresh imposition
Published by RBI
26 Feb 2026
Case Brief
The Reserve Bank of India imposed a monetary penalty on Vita Merchants’ Co-operative Bank Ltd., Vita, Maharashtra, by order dated February 13, 2026. RBI said the bank had not complied with directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Fair Lending Practice - Penal Charges in Loan Accounts’. After inspection, show-cause notice, reply, and oral hearing, RBI sustained two charges: the bank sanctioned loans to certain nominal members beyond the prescribed regulatory limit, and it did not communicate the levy of penal charges and the reasons for those charges to certain borrowers. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
Why RBI Acted
RBI imposed a monetary penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949 after a supervisory inspection found non-compliance with RBI directions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Fair Lending Practice - Penal Charges in Loan Accounts’. The sustained charges were that the bank sanctioned loans to certain nominal members in excess of the prescribed regulatory limit and failed to communicate the levy of penal charges and the reasons for them to certain borrowers.
Operating Impact
The bank must absorb a monetary penalty of Rs 3.10 lakh; the release does not itself impose a new operating restriction or cancellation. The findings may also support further regulatory action by RBI if warranted, but no direct forward-looking restriction is stated in this order.
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 3.10 L
- Order Date
- 13 Feb 2026
- Effective From
- 13 Feb 2026
- Entities Affected
- 1
- Entity Role
- Bulk Member
- Entity Type
- Co-operative bank