In its June 2025 issue of the Financial Stability Report (FSR), the Reserve Bank of India highlighted that between December 2024 and May 2025, it undertook enforcement actions against 177 regulated entities (REs) for violations of statutory provisions and non-compliance with its directives, including 118 cooperative banks.
A cumulative penalty of Rs 29.15 crore was imposed during this period. Cooperative banks emerged as the most penalized category, with 118 institutions facing enforcement action, underscoring ongoing regulatory and compliance concerns within the cooperative banking sector.
The remaining penalized entities included 10 public sector banks, 12 private sector banks, 22 NBFCs, and others including small finance banks (SFBs), foreign banks, and regional rural banks (RRBs).
During the financial year 2024–25, the RBI imposed a staggering 264 penalties on cooperative banks, far surpassing all other categories of regulated entities. The total penalty amount levied on cooperative banks during the fiscal stood at Rs 15.63 crore.
However, since there are over 1,800 cooperative banks in the country, including urban cooperative banks, state cooperative bank and district central cooperative banks, the enforcement actions point to problems in only a small section of the sector, showing that most cooperative banks are still following the rules properly.