RBI Imposes ₹4.25 Lakh Penalty on 3 Cooperative Banks for Regulatory Lapses
Moneylife Digital Team 09 December 2025
Reserve Bank of India (RBI) has imposed a total penalty of ₹4.25 lakh on three cooperative banks for non-compliance with its regulatory directions. The highest penalty has been imposed on Maharashtra-based Yavatmal Urban Cooperative Bank Ltd.
 
Other banks penalised by RBI are: Pattukottai Cooperative Urban Bank Ltd from Tamil Nadu and Assam Cooperative Apex Bank Ltd from Guwahati.
 
Yavatmal Urban Cooperative Bank has been penalised for failing to comply with certain RBI directives related to concentration risk management, the treatment of wilful and large defaulters and credit information reporting.
 
RBI’s statutory inspection found that Yavatmal Urban Cooperative Bank had sanctioned loans beyond the prescribed regulatory limits to certain nominal members and had also failed to report information on some borrowers classified as wilful defaulters to credit information companies within the required regulatory timeline.
 
Pattukottai Cooperative Urban Bank has been fined ₹1.50 lakh for violating Section 17 of the Banking Regulation Act, 1949 (BR Act) and for failing to comply with RBI directions on exposure norms, statutory and other restrictions for urban cooperative banks (UCBs), as well as know-your-customer (KYC) requirements.
 
According to RBI, Pattukottai Cooperative Urban Bank failed to transfer 20% of its net profit for the FY23–24 to the statutory reserve, sanctioned loans beyond the prescribed regulatory limits to certain nominal members and did not upload customers' KYC records to the central KYC records registry (CKYCR) within the required timeline.
 
Guwahati-based Assam Cooperative Apex Bank has been penalised ₹50,000 for non-compliance with RBI’s KYC directions. The lender had failed to conduct the required periodic review of risk categorisation of accounts which must be carried out at least once every six months.
 
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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