The Reserve Bank of India (RBI) has imposed monetary penalties on four cooperative banks—Pusad Urban Cooperative Bank, Siddheshwar Urban Cooperative Bank, Hindusthan Cooperative Bank, and Deccan Merchants Cooperative Bank—for violations of various regulatory norms.
A penalty of Rs 7.50 lakh has been levied on Pusad Urban Cooperative Bank Ltd., Pusad, Maharashtra for non-compliance with RBI directions on Income Recognition, Asset Classification, Provisioning and Other Related Matters – UCBs, Co-operative Banks – Interest Rates on Deposits, and specific directives under the Supervisory Action Framework (SAF).
The RBI has also imposed a penalty of Rs 50,000 on Siddheshwar Urban Co-operative Bank Maryadit, Sillod, Aurangabad, Maharashtra, for breaching guidelines related to Placement of Deposits with Other Banks by Primary (Urban) Co-operative Banks (UCBs).
A monetary penalty of Rs 3.00 lakh has been imposed on the Hindusthan Co-operative Bank Ltd., Mumbai, for failing to comply with directions on Maintenance of Deposit Accounts – Primary (Urban) Co-operative Banks.
Further, the RBI has penalized Deccan Merchants Co-operative Bank Ltd., Mumbai, Rs 2.00 lakh for non-compliance with instructions on Loans and Advances to Directors, their Relatives, and Firms/Concerns in which they are Interested.
These penalties have been imposed under the powers conferred on RBI by Section 47A(1)(c), read with Sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.
In the financial year 2024–25, the Reserve Bank of India (RBI) significantly tightened its regulatory oversight of cooperative banks.
As per the data received by the analysis team of Indian Cooperative from various sources and research, the RBI imposed fines on four State Cooperative Banks (StCBs) and 51 District Central Cooperative Banks (DCCBs) for various violations. Urban Cooperative Banks (UCBs) faced even stricter measures, with a total of 215 penalties imposed on UCBs during the year.
Additionally, the RBI placed seven new UCBs under its All-Inclusive Directions (AID), restricting key operations, including deposit withdrawals. However, four UCBs were removed from AID after improving their performance.
During the year the licenses of seven UCBs under AID were canceled, while two others lost their licenses following mergers with more compliant entities. These actions, coupled with monthly penalties and ongoing regulatory follow-ups, signal the central bank’s strong commitment to protecting depositors and maintaining systemic integrity.
