The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 14.25 lakh on Nagar Sahkari Bank Ltd. for non-compliance with various regulatory directions related to asset classification, lending practices, exposure norms, and reporting requirements.

The penalty was levied following RBI's statutory inspection of the bank's financial position as of March 31, 2025. After reviewing supervisory findings, the bank's response, and submissions made during a personal hearing, the central bank concluded that several regulatory lapses had occurred.

According to RBI, the bank failed to properly identify and classify certain non-performing assets (NPAs), breached prescribed limits on unsecured advances, did not upload borrower information to Credit Information Companies (CICs), and failed to exercise adequate diligence in some loan sanctions.

The central bank clarified that the penalty relates solely to deficiencies in regulatory compliance and does not affect the validity of transactions or agreements between the bank and its customers. RBI also noted that the action is without prejudice to any further regulatory measures that may be taken against the bank.