RBI imposed Rs 14.25 lakh penalty on Nagar Sahkari Bank Ltd, Maharajganj, UP on May 26, 2026 for regulatory violations. Statutory inspection revealed non-compliance in NPA classification, exceeding unsecured loan limits, failure to upload borrower data to Credit Information Companies, and deficiencies in loan sanctioning. The penalty follows show-cause notice and bank's response. Action doesn't affect customer transactions but reserves future regulatory measures.

This penalty exemplifies RBI's supervisory enforcement against cooperative banks for regulatory non-compliance. The violations span critical banking functions: asset classification (NPA identification), credit concentration limits (unsecured lending caps), data reporting mandates (CIC submissions), and credit appraisal standards. These areas reflect core prudential norms designed to maintain banking system stability. The statutory inspection mechanism under Section 35 of Banking Regulation Act enables RBI to assess compliance and impose monetary penalties under Section 47A for violations. Cooperative banks, despite state government oversight, remain subject to RBI's banking regulations since the 2020 amendments brought them fully under central banking supervision. The penalty amount reflects violation severity while preserving customer interests. This enforcement demonstrates RBI's commitment to uniform regulatory standards across all banking entities, crucial for financial system integrity and depositor protection.