The Reserve Bank of India has imposed a monetary penalty of Rs 5 lakh on Hutatma Sahakari Bank Ltd. for non-compliance with RBI directions relating to loans and advances granted to directors, their relatives, and associated firms or concerns.

The penalty was imposed through an order dated June 19, 2026, under the provisions of the Banking Regulation Act, 1949. The action follows RBI's statutory inspection of the bank based on its financial position as of March 31, 2025.

According to the central bank, the bank was found to have sanctioned loans to a relative of one of its directors, violating regulatory guidelines. After reviewing the bank's response to a show-cause notice and considering submissions made during a personal hearing, RBI concluded that the charge was substantiated and warranted a monetary penalty.

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