The Reserve Bank of India (RBl) has, by an order dated June 30, 2025, imposed a monetary penalty of ₹4.00 lakh (Rupees Four Lakh only) on Shree Chhani Nagarik Sahakari Bank Limited, Vadodara, Gujarat (the bank) for non-compliance with certain directions issued by RBI on ‘Know Your Customer (KYC)’, ‘Customer Protection - Limiting Liability of Customers of Co-operative Banks in Unauthorised Electronic Banking Transactions’, ‘Basic Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs)’ and ‘Comprehensive Cyber Security Framework for Primary (Urban) Cooperative Banks (UCBs) – A Graded Approach’. 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 the 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, RBI found, inter alia, that the following charges against the bank were sustained, warranting imposition of monetary penalty:

The bank had failed to:

carry out periodic review of risk categorisation of certain accounts at least once in six months;
provide customers with 24x7 access to report unauthorized electronic banking transactions through multiple channels; and
implement certain cyber security controls prescribed by RBI under the Cyber Security Framework.

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.

(Puneet Pancholy)
Chief General Manager

Press Release: 2025-2026/646

Chhani Press Release