RBI Fines 3 Cooperative Banks Rs4 Lakh for Violating Prudential and KYC Norms
Moneylife Digital Team 11 November 2025
Reserve Bank of India (RBI) has imposed penalties totalling Rs4 lakh on three cooperative banks for failing to comply with the directions issued by the banking regulator. The highest penalty of Rs2 lakh has been imposed on Maharashtra-based Mumbai District Central Co-operative (DCC) Bank Ltd.
 
Other banks penalised by RBI include: Karaikudi Cooperative Town Bank Ltd from Tamil Nadu and District Cooperative Central Bank Ltd from Andhra Pradesh.
 
Mumbai DCC Bank has been penalised for contravention of provisions of Section 20 of the Banking Regulation Act, 1949 (BR Act).
 
RBI's statutory inspection found that Mumbai DCC Bank had sanctioned certain director related loans. 
 
Karaikudi Cooperative Town Bank has been fined Rs1.50 lakh for violating RBI directions related to prudential norms on capital adequacy for primary urban cooperative banks (UCBs) and know-your-customer (KYC) requirements.
 
According to RBI, Karaikudi Cooperative Town Bank refunded share capital to its members even though its capital to risk-weighted assets ratio (CRAR) was below the regulatory minimum. It also sanctioned loans without following the mandatory share linking to borrowings norm, again, despite its inadequate CRAR. In addition, the Bank failed to upload customer KYC records to the central KYC records registry (CKYCR) within the prescribed timeline.
 
Andhra Pradesh-based District Cooperative Central Bank has been penalised for non-compliance with certain directions issued by RBI on KYC.The lender had failed to upload the KYC records of customers onto CKYCR within the prescribed timeline.
 
In all three cases, RBI says the penalties are based on deficiencies in regulatory compliance and are not intended to be pronounced on the validity of any transaction or agreement they entered into with their customer.
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