<h1>Conflict of interest in bank governance: regulator found trustees acting as directors and imposed supervisory sanctions.</h1> Inspection found The Nasik Merchants' Co-operative Bank Ltd. had created NAMCO Charitable Trust whose seven trustees were also bank directors, constituting a recurring conflict of interest and non-compliance with Section 6(1)(j) of the Banking Regulation Act (as applicable to co-operative societies). Following a show cause notice and the bank's reply, the regulator determined the violations were substantiated, classified them as major, and imposed a monetary penalty under its statutory powers for breach of supervisory instructions.