Reserve Bank of India (RBI) has imposed a penalty of ₹44.80 lakh on five cooperative banks for non-compliance with the directions issued by the banking regulator. The highest penalty of ₹13.30 lakh has been imposed on Gujarat-based Surat People’s Cooperative Bank Ltd.
Other banks penalised by RBI are: Chikhli Urban Cooperative Bank Ltd and Ashok Sahakari Bank Ltd from Maharashtra, Sambalpur District Cooperative Central Bank Ltd from Odisha and Nawada Central Cooperative Bank Ltd from Bihar.
Surat People’s Cooperative Bank has been penalised for failing to comply with certain RBI directions relating to the board of directors of urban cooperative banks (UCBs).
The statutory inspection of Surat People’s Cooperative Bank, conducted by RBI with reference to its financial position as of 31 March 2025, found that certain directors of the Bank participated in board meetings where proposals in which they had a direct or indirect interest were discussed and approved. This amounted to a violation of RBI's directions governing the functioning of the board of directors of urban cooperative banks.
Chikhli Urban Cooperative Bank has been fined ₹13 lakh for violating the provisions of Section 26A of the Banking Regulation Act, 1949 (BR Act), and for failing to comply with certain RBI directions relating to finance for housing schemes, UCBs, and know-your-customer (KYC) norms.
RBI found that Chikhli Urban Cooperative Bank had failed to transfer eligible unclaimed deposits to the depositor education and awareness (DEA) fund within the prescribed timeframe, sanctioned loans to builders and contractors for the acquisition of land in violation of RBI directions and failed to implement a robust software system for the effective identification and reporting of suspicious transactions.
RBI also inspected Ashok Sahakari Bank and found that the lender had sanctioned a loan to one of its directors. As a result, RBI imposed a penalty of ₹10 lakh on the lender.
Odisha-based Sambalpur District Cooperative Central Bank has been penalised ₹8 lakh by RBI for violating the provisions of Section 26A of the BR Act and for failing to comply with RBI's KYC directions. RBI found that the lender had failed to transfer eligible unclaimed deposits to the DEA Fund within the prescribed timeframe and had not put in place a system for periodically reviewing the risk categorisation of its customers.
Nawada Central Cooperative Bank has also been penalised ₹50,000 by RBI for non-compliance with its KYC directions. During the inspection, RBI found that the lender had failed to upload the customer's KYC records to the central KYC records registry (CKYCR) within the prescribed timeline.
In all five cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to affect the validity of any transaction or agreement they entered into with their customers.
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