In a fresh push to tighten regulatory discipline, the Reserve Bank of India (RBI) has imposed monetary penalties on two cooperative banks for non-compliance with key norms, highlighting persistent gaps in governance and risk management.
Hardoi Jilla Sahkari Bank Ltd., Uttar Pradesh, has been fined Rs 1 lakh for failing to adhere to RBI’s ‘Know Your Customer (KYC)’ guidelines. The lapse stemmed from the bank’s inability to implement a system for periodic review of risk categorisation of accounts, a critical requirement aimed at preventing financial irregularities.
The inspection, carried out by National Bank for Agriculture and Rural Development (NABARD), flagged the deficiency based on the bank’s financial position as of March 31, 2025.
In a separate action, RBI penalised Dr. Babasaheb Ambedkar Nagari Sahakari Bank Ltd., Aurangabad, Rs 80,000 for breaching exposure norms and violating operational guidelines under the Supervisory Action Framework (SAF). The bank was found to have exceeded regulatory lending limits and offered deposit interest rates higher than permitted benchmarks.
RBI clarified that the penalties are based solely on compliance shortcomings and do not impact customer transactions, while leaving room for further supervisory action if required.