Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 16.30 lakh on Shree Kadi Nagarik Sahakari Bank Ltd. for non-compliance with regulatory directions related to exposure norms and management of advances applicable to urban cooperative banks (UCBs).

The penalty was imposed through an order dated May 6, 2026, under provisions of the Banking Regulation Act, 1949.

The action follows a statutory inspection conducted by RBI with reference to the bank’s financial position as of March 31, 2025. Based on supervisory findings and subsequent correspondence, RBI issued a show-cause notice to the bank seeking an explanation for the observed violations.

After considering the bank’s reply and oral submissions during the personal hearing, RBI found that the bank had breached prudential exposure limits prescribed for a group of connected borrowers or parties. The bank was also found to have failed in ensuring the proper end-use of funds for certain loans sanctioned by it.

The central bank clarified that the penalty is based on deficiencies in regulatory compliance and does not impact the validity of transactions or agreements entered into by the bank with its customers.