RBI Imposes Rs17 Lakh Penalty on 3 Cooperative Banks from Maharashtra

Moneylife Digital Team 11 July 2025

Investor Interest

Reserve Bank of India (RBI) has imposed a penalty of Rs17 lakh on three cooperative banks from Maharashtra for non-compliance with the directions issued by the banking regulator. The highest penalty of Rs15 lakh has been imposed on Solapur Janata Sahakari Bank Ltd.

Other banks penalised by RBI are Dr Babasaheb Ambedkar Urban Cooperative Bank Ltd and Mahesh Urban Cooperative Bank Ltd.

Solapur Janata Sahakari Bank has been penalised for contravention of provisions of Section 5(ccv) (iii) of the Banking Regulation Act, 1949 (BR Act). A recent statutory inspection by the RBI revealed that Solapur Janata Sahakari Bank's bye-laws permitted admission of a cooperative society as a member in the Bank, in contravention of the provisions of the BR Act.

Further, Dr Babasaheb Ambedkar Urban Cooperative Bank has been fined Rs1.50 lakh by RBI for failing to comply with regulatory directions. The violations relate to RBI’s guidelines on loans and advances to directors, their relatives, and entities in which they have an interest, as well as specific instructions issued under the supervisory action framework (SAF) for Urban Cooperative Banks (UCBs).

RBI observed that Dr Babasaheb Ambedkar Urban Cooperative Bank had sanctioned a loan linked to one of its directors and failed to reduce its single borrower exposure limit by 50% for fresh loans and advances, as mandated under the SAF guidelines.

Mahesh Urban Cooperative Bank has been fined Rs50,000 for failing to comply with certain exposure norms and statutory restrictions applicable to UCBs. The penalty relates to violations of RBI’s specific directions under the SAF. The lender did not reduce its single borrower exposure limit by 50% for fresh loans and advances, as required under SAF guidelines. Additionally, it breached the single counterparty exposure limit for Non-SLR investments.

"After considering the reply and oral submissions of all the three banks during the personal hearing, RBI concluded that the charges of non-compliance with directions were substantiated and warranted imposition of monetary penalty," RBI says.

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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