On October 30, 2025, the Reserve Bank of India (RBI) announced it has imposed a monetary penalty of ₹25 lakh on The Mehsana Urban Co-operative Bank Limited, Gujarat, via an order dated October 28, 2025, due to non-compliance with directions on ‘Income Recognition, Asset Classification, Provisioning and Other Related Matters - UCBs'. The penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949. The statutory inspection of the bank was conducted with reference to its financial position as on March 31, 2024. A notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank's reply, oral submissions, and additional submissions, RBI sustained the charge against the bank for not classifying credit facilities of certain borrowers as non-performing assets (NPAs). This action is based on deficiencies in regulatory compliance and is without prejudice to any other action that may be initiated by RBI against the bank. The press release number is 2025-2026/1418. Contact person: (Brij Raj), Chief General Manager. The Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort, Mumbai - 400 001. Phone: 022 - 2266 0502. Website: www.rbi.org.in, Email: helpdoc@rbi.org.in.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank imposing the monetary penalty.
The Mehsana Urban Co-operative Bank Limited, Gujarat: The bank on which the monetary penalty has been imposed.
Banking Regulation Act, 1949: The Act under which the penalty has been imposed.
Section 47A(1)(c): Section of the act granting power to impose penalties.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
October 30, 2025
RBI imposes monetary penalty on The Mehsana Urban Co-operative Bank
Limited, Gujarat
The Reserve Bank of India (RBI) has, by an order dated October 28, 2025, imposed
a monetary penalty of ₹25 lakh (Rupees Twenty Five Lakh only) on The Mehsana
Urban Co-operative Bank Limited, Gujarat (the bank), for non-compliance with certain
directions issued by RBI on ‘Income Recognition, Asset Classification, Provisioning
and Other Related Matters - UCBs’. This penalty has been imposed in exercise of
powers conferred on RBI under the provisions of Section 47A(1)(c) read with Sections
46(4)(i) and 56 of the Banking Regulation Act, 1949.
The statutory inspection of the bank was conducted by RBI with reference to its
financial position as on March 31, 2024. Based on supervisory findings of non-
compliance with RBI directions and related correspondence in that regard, a notice
was issued to the bank advising it to show cause as to why penalty should not be
imposed on it for its failure to comply with the said directions.
After considering the bank’s reply to the notice, oral submissions made during the
personal hearing and additional submissions made by it, RBI found that the following
charge against the bank was sustained, warranting imposition of monetary penalty:
The bank did not classify credit facilities of certain borrowers as non-performing
assets (NPAs).
This action is based on deficiencies in regulatory compliance and is not intended to
pronounce upon the validity of any transaction or agreement entered into by the bank
with its customers. Further, imposition of this monetary penalty is without prejudice to
any other action that may be initiated by RBI against the bank.
(Brij Raj)
Press Release: 2025-2026/1418 Chief General Manager