The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 50,000 on The Amravati Merchants Sahakari Bank Ltd. for non-compliance with regulatory directions relating to loans and advances granted to directors, their relatives, and entities in which they have an interest.

The penalty was imposed through an order dated June 4, 2026, following 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. After reviewing the bank's written response, additional submissions, and oral representations during a personal hearing, the regulator concluded that the bank had sanctioned certain loans related to its directors, in violation of the prescribed norms.

RBI stated that the penalty is based on deficiencies in regulatory compliance and does not affect the validity of any transactions or agreements entered into by the bank with its customers. The central bank also clarified that the action is without prejudice to any further regulatory measures that may be initiated against the bank.