The Reserve Bank of India (RBI) has imposed a fine of ₹2 lakh on Gomti Nagariya Sahakari Bank Ltd., based in Jaunpur, Uttar Pradesh, for failing to follow certain regulatory directions. This action was taken under the legal powers granted to RBI through the Banking Regulation Act, 1949. The penalty was announced on July 30, 2025.
The issue came to light during a statutory inspection conducted by the RBI, which reviewed the bank’s financial position as of March 31, 2024. During this inspection, RBI found that the bank had not complied with certain instructions issued under the Supervisory Action Framework (SAF), a set of rules designed to guide banks that are under financial or operational stress.
Based on these findings, RBI issued a notice to the bank asking it to explain why a penalty should not be levied. After reviewing the bank’s written explanation and hearing its arguments in person, RBI concluded that the bank had indeed violated the rules.
In non-adherence to directions issued under SAF, the bank had:
- sanctioned fresh loans and advances carrying risk weights of more than 100%; and
- offered higher interest rates on term deposits than those offered by State Bank of India.
RBI clarified that this penalty is strictly for lapses in following regulatory norms and is not meant to question the legitimacy of any of the bank’s dealings with its customers. Additionally, the RBI may take further action against the bank if necessary.
