The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 4 lakh on Shree Chhani Nagarik Sahakari Bank Limited, located in Vadodara, Gujarat, for non-compliance with multiple RBI directives related to Know Your Customer (KYC) norms, customer protection in unauthorised electronic banking transactions, and cyber security frameworks for Urban Co-operative Banks (UCBs).

The penalty, dated June 30, 2025, has been levied under Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

The action follows a statutory inspection conducted by the RBI, based on the bank’s financial position as of March 31, 2024. Upon review of supervisory findings and subsequent correspondence, the RBI issued a show-cause notice to the bank.

After examining the bank’s response, RBI confirmed the following violations:

Failure to conduct periodic risk categorisation reviews for certain accounts at least once every six months.

Non-provision of 24x7 customer access to report unauthorised electronic banking transactions through multiple channels.

Inadequate implementation of cyber security controls as mandated under RBI's Cyber Security Framework for UCBs.

RBI clarified that the penalty is based solely on regulatory compliance deficiencies and does not impact the validity of any transactions or agreements made by the bank with its customers. The imposition of this penalty is also without prejudice to any further regulatory actions that may be taken by the central bank.