RBI Slaps ₹7 Lakh Penalty on 3 Cooperative Banks for Compliance Failures
Moneylife Digital Team 23 June 2026
Reserve Bank of India (RBI) has imposed penalties totalling ₹7 lakh on three cooperative banks for non-compliance with various regulatory directions issued by the banking regulator. The highest penalty of ₹5 lakh has been imposed on Hutatma Sahakari Bank Ltd from Maharashtra.
 
The other banks penalised by RBI are: Karnataka-based Shimoga District Cooperative Central Bank Ltd and Andhra Pradesh-based Chittoor District Cooperative Central Bank Ltd. Each of the banks has been fined ₹1 lakh.
 
Hutatma Sahakari Bank has been penalised for non-compliance with RBI directions relating to loans and advances granted to directors, their relatives, and firms or concerns in which they have an interest.
 
The statutory inspection of Hutatma Sahakari Bank, which was conducted by RBI with reference to its financial position as on 31 March 2025, revealed that the lender had sanctioned loans to a relative of its director.
 
Shimoga District Cooperative Central Bank and Chittoor District Cooperative Central Bank were penalised for contravening the provisions of Section 20 read with Section 56 of the Banking Regulation Act, 1949.
 
The violations were detected during statutory inspections carried out by the National Bank for Agriculture and Rural Development (NABARD). The inspections revealed that both lenders had sanctioned or renewed loans to their directors or to entities in which the directors had an interest, contrary to the provisions governing director-related lending.
 
In all three cases, RBI clarified that the penalties were based on deficiencies in regulatory compliance and were not intended to pronounce on the validity of any transaction or agreement entered into by banks with their customers.
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