Reserve Bank of India (RBI) has imposed penalties aggregating ₹2.15 lakh on three cooperative banks, two in Maharashtra and one in Uttar Pradesh (UP), for violating various regulatory directions. The highest penalty of ₹1.05 lakh has been imposed on UP, Gorakhpur-based NE & EC Railway Employees Multi-state Primary Cooperative Bank Ltd, followed by ₹1 lakh on Nirmal Urban Cooperative Bank Ltd and ₹10,000 on Dharmavir Sambhaji Urban Cooperative Bank Ltd from Maharashtra.
The ₹1.05 lakh penalty on NE & EC Railway Employees Multi-state Primary Cooperative Bank has been imposed for contravening the provisions of Section 26A read with Section 56 of the Banking Regulation Act, (BR Act) 1949 and for non-compliance with RBI's directions on membership of credit information companies (CICs).
The action follows RBI's statutory inspection of NE & EC Railway Employees Multi-state Primary Cooperative Bank with reference to its financial position as on 31 March 2025. During the inspection, RBI found that the lender had failed to transfer eligible unclaimed deposits to the depositor education and awareness (DEA) fund within the prescribed time. The regulator also found that the lender had neither obtained membership of two CICs nor submitted borrower's credit information to all four CICs, as mandated.
RBI has also levied a ₹1 lakh penalty on Nirmal Urban Cooperative Bank for violating its directions on exposure limits to single and group borrowers, large exposures, revised priority sector lending targets for urban cooperative banks (UCBs) and operational instructions issued under the supervisory action framework (SAF).
According to RBI, Nirmal Urban Cooperative Bank failed to reduce the exposure limit for certain fresh loans and advances to a single borrower by 50% of the applicable regulatory limit. It also offered interest rates on certain deposits that were higher than those offered by State Bank of India (SBI).
Further, RBI imposed a penalty of ₹10,000 on Dharmavir Sambhaji Urban Cooperative Bank after finding that the lender had failed to upload customers' know-your-customer (KYC) records to the central KYC records registry (CKYCR) within the prescribed timeline.
In all three cases, RBI says the penalties have been imposed solely on account of deficiencies in regulatory compliance. The regulator said the action does not question the validity of any transaction or agreement entered into by the banks with their customers and is without prejudice to any other action that may be initiated against them.
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