The Reserve Bank of India (RBI) has imposed monetary penalties on two District Central Co-operative Banks (DCCBs) and three Urban Co-operative Banks (UCBs) for various regulatory and statutory non-compliances identified during supervisory inspections for the financial position as on March 31, 2025.
RBI imposed a penalty of Rs 2 lakh on The Belagavi District Central Co-operative Bank Limited, Karnataka for contravention of provisions under the Banking Regulation Act, 1949, and non-compliance with RBI directions relating to gold loans and exposure to commercial real estate. The bank was found to have sanctioned director-related loans, extended gold loans under the bullet repayment scheme beyond prescribed limits, and financed a non-residential commercial real estate project.
Similarly, a penalty of Rs 1 lakh was imposed on The Mahbubnagar District Co-operative Central Bank Ltd., Telangana for sanctioning director-related loans in violation of statutory provisions.
Among Urban Co-operative Banks, RBI levied a penalty of Rs 3.10 lakh on Vita Merchants’ Co-operative Bank Ltd., Maharashtra for breaching exposure norms and fair lending practices. The bank had sanctioned loans to certain nominal members beyond regulatory limits and failed to communicate penal charges and reasons to some borrowers.
A penalty of Rs 50,000 was imposed on The Prakasapuram Co-operative Urban Bank Limited, Tamil Nadu for declaring dividend from accumulated profits of previous years, in non-compliance with RBI’s directions on dividend declaration by UCBs.
Additionally, RBI fined Rs 50,000 on The Guntur Women Co-operative Urban Bank Limited, Andhra Pradesh, for failing to upload customers’ KYC records to the Central KYC Records Registry (CKYCR), violating KYC norms.
