Reserve Bank of India (RBI) has imposed a penalty of ₹27.30 lakh on six cooperative banks for non-compliance with the directions issued by the banking regulator. The highest penalty of ₹13.30 lakh has been imposed on Sindhudurg District Central Cooperative (DCC) Bank Ltd from Maharashtra.
Other banks penalised by RBI are Maharashtra-based Arvind Sahakari Bank Ltd, Rajnandgaon Kendriya Sahakari Bank Maryadit from Chhattisgarh, Shri Baria Nagarik Sahakari Bank Ltd from Gujarat and Karnataka-based Mandya DCC Bank Ltd and City Cooperative Bank.
Sindhudurg DCC Bank has been penalised for contravention of provisions of section 20(1) of the Banking Regulation Act, 1949 (BR Act).
The statutory inspection of Sindhudurg DCC Bank, conducted by the National Bank for Agriculture and Rural Development (NABARD), revealed that the lender had sanctioned a director-related loan.
Arvind Sahakari Bank has been fined ₹11 lakh for violating RBI directions on housing finance for urban cooperative banks (UCBs) and interest rates on deposits. During its inspection, RBI found that the lender had sanctioned loans to builders and contractors for land acquisition and had also paid additional interest to certain depositors who were not eligible to receive it.
RBI also inspected Rajnandgaon Kendriya Sahakari Bank and found out that the lender had paid additional interest to certain ineligible depositors.
As a result, RBI imposed a penalty of ₹1 lakh on the Rajnandgaon Kendriya Sahakari Bank.
Gujarat-based Baria Nagarik Sahakari Bank has also been penalised ₹1 lakh for non-compliance with certain directions issued by RBI on inspection and audit systems in primary UCBs. RBI found out that the lender had failed to conduct an internal audit from 1 April 2023 to 31 March 2025.
City Cooperative Bank in Karnataka has been penalised ₹50,000 for non-compliance with RBI know-your-customer (KYC) directions. The lender failed to upload customers' KYC records to the central KYC records registry (CKYCR) within the prescribed timeline.
Mandya DCC Bank has been penalised ₹50,000 for violating the provisions of Section 19 of the BR Act. RBI found that the lender had held shares in other cooperative societies, in contravention of the provisions of the BR Act.
In all six 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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