The Reserve Bank of India (RBI) has tightened its supervisory action against the cooperative banking sector by imposing monetary penalties on four cooperative banks for various regulatory and statutory violations detected during inspections based on their financial position as of March 31, 2025.
The highest penalty of Rs 10.10 lakh was imposed on Raigad District Central Co-operative Bank Ltd., Maharashtra, for sanctioning director-related loans in violation of the Banking Regulation Act and failing to report borrowers’ credit information to all Credit Information Companies (CICs).
Another Rs 7 lakh penalty was levied on Sangli District Central Co-operative Bank Ltd., Maharashtra, for sanctioning director-related loans, contravening provisions of the Banking Regulation Act.
In Karnataka, The Citizen Co-operative Bank Ltd., Bengaluru, was fined Rs 50,000 for failing to classify certain loan accounts as Non-Performing Assets (NPAs) in accordance with RBI’s prudential norms on income recognition and asset classification.
Meanwhile, Jilla Sahakari Kendriya Bank Maryadit, Shajapur (Madhya Pradesh) was penalised Rs 1 lakh for failing to transfer eligible unclaimed deposits to the Depositor Education and Awareness (DEA) Fund within the prescribed timeline.
The RBI clarified that the penalties were imposed for deficiencies in regulatory and statutory compliance and do not question the validity of transactions entered into by the banks with their customers.
The central bank also stated that the monetary penalties are without prejudice to any further supervisory or regulatory action that may be initiated against the concerned banks.
