The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 11 lakh on Arvind Sahakari Bank Ltd., Katol, Maharashtra, for non-compliance with regulatory directions relating to housing finance for urban co-operative banks (UCBs) and interest rates on deposits.

The penalty, imposed through an order dated July 16, 2026, follows RBI's statutory inspection of the bank based on its financial position as of March 31, 2025. After reviewing the inspection findings, the bank's written response, additional submissions, and oral representations during a personal hearing, the central bank concluded that the violations warranted regulatory action.

According to the RBI, the bank had sanctioned loans to builders and contractors for land acquisition, in violation of regulatory norms, and paid additional interest to certain ineligible depositors.

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