RBI Imposes Rs8.60 Lakh Penalty 3 Cooperative Banks
Moneylife Digital Team 09 September 2025
Reserve Bank of India (RBI) has imposed penalties totalling Rs8.60 lakh on three cooperative banks for failing to comply with the directions issued by the banking regulator. The highest penalty of Rs5.50 lakh has been imposed on Bidar-based District Cooperative Central (DCC) Bank Ltd.
 
Other entities penalised by RBI include Raigad DCC Bank Ltd from Maharashtra and Ottapalam Cooperative Urban Bank Ltd from Kerala.
 
DCC Bank has been penalised for contravention of provisions of Sections 20 and 31 of the Banking Regulation Act, 1949 (BR Act).
 
RBI's statutory inspection found that the lender had sanctioned director-related loans and failed to publish its accounts and balance sheet for the FY23-24, and also to furnish the copies thereof to RBI and National Bank for Agriculture and Rural Development (NABARD) within the prescribed timeline. 
 
RBI also inspected Raigad DCC Bank and found out that the lender had sanctioned or renewed loans to its directors. 
 
As a result, RBI imposed a penalty of Rs2.10 lakh on Raigad DCC Bank.
 
Ottapalam Cooperative Urban Bank has been fined Rs1 lakh by RBI for non-compliance with directions under the supervisory action framework (SAF) and for violating provisions of the RBI master directions on credit and debit card issuance and conduct (2022). The lender had sanctioned fresh loans and advances with risk weights exceeding 100%, in violation of directions under the SAF. It had also issued debit cards to certain cash credit accounts.
 
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.
Comments
Free Helpline
Legal Credit
Feedback