RBI imposes monetary penalty on Maharashtra Gramin Bank, Aurangabad
The Reserve Bank of India (RBI) has imposed monetary penalty on Maharashtra Gramin Bank, Aurangabad. By an order dated August 12, 2025, RBI has imposed a monetary penalty of ₹4.20 lakh (Rupees Four Lakh Twenty Thousand only) on Maharashtra Gramin Bank, Aurangabad (the bank) for non-compliance with certain directions issued by National Bank for Agriculture and Rural Development (NABARD) on ‘Offsite Surveillance System – Revision of Due dates for Submission of OSS/FMS Returns’ and certain directions issued by RBI on ‘Know Your Customer (KYC)’.
This penalty has been imposed in exercise of powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections 46(4)(i) and 51(1) of the Banking Regulation Act.
NABARD conducted a statutory inspection of the bank to assess its financial position as on March 31, 2024. Based on the supervisory findings indicating non-compliance with directions issued by NABARD and the RBI, and subsequent correspondence on the matter, a notice was issued to the bank requiring it to show cause as to why a penalty should not be imposed for its failure to comply with the said directions. After reviewing the bank’s written response and the oral submissions made during the personal hearing, the RBI concluded that certain charges against the bank were established, thereby warranting the imposition of a monetary penalty.
The penalty has been imposed as the Maharashtra Gramin Bank:
- reported certain frauds to NABARD with delay; and
- failed to put in place a system of periodic review of risk categorisation of accounts, with such periodicity being at least once in six months.
This action is being taken due to shortcomings in regulatory compliance and does not affect the validity of any transaction or agreement between the bank and its customers. Furthermore, the imposition of a monetary penalty is without prejudice to any other action the RBI may choose to initiate against the bank.
