At a time when the International Conference of the Urban Cooperative Credit Sector – “Co-op Kumbh 2025” -was underway in New Delhi, focusing on transparency and digital transformation in the cooperative sector, the Reserve Bank of India (RBI) issued a press release on Monday stating that it has imposed monetary penalties on three cooperative banks for non-compliance with various regulatory norms.
By orders dated November 6, 2025, the RBI imposed a penalty of Rs 2 lakh on The Mumbai District Central Co-operative Bank Ltd., Maharashtra, for contravention of Section 20 of the Banking Regulation Act, 1949, which restricts banks from granting loans and advances to their own directors or related entities.
The Karaikudi Co-operative Town Bank Ltd., Tamil Nadu, faced a penalty of Rs 1.5 lakh for non-compliance with RBI directions on ‘Prudential Norms on Capital Adequacy – Primary (Urban) Co-operative Banks (UCBs)’ and ‘Know Your Customer (KYC)’ guidelines.
Similarly, the District Co-operative Central Bank Ltd., Eluru, Andhra Pradesh, was fined Rs 50,000 for violations related to KYC norms. This penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
