The Reserve Bank of India (RBI) has imposed monetary penalties on two cooperative banks for non-compliance with regulatory directions, reinforcing its supervisory oversight in the cooperative banking sector.
In an order dated February 9, 2026, RBI levied a penalty of Rs 3 lakh on the Ganganagar Kendriya Sahakari Bank Limited, Rajasthan, for violations of Know Your Customer (KYC) norms. The statutory inspection of the bank was conducted by NABARD with reference to its financial position as on March 31, 2025.
RBI found that the bank had failed to put in place a system for periodic review of risk categorisation of accounts at least once every six months and had not carried out periodic updation of KYC of customers as prescribed. The penalty was imposed after considering the bank’s response to a show-cause notice and oral submissions.
In a separate action dated February 11, 2026, RBI imposed a penalty of Rs 2 lakh on The Berhampur Co-operative Urban Bank Limited, Odisha, for breaching prudential inter-bank (gross) exposure limits and inter-bank counter-party limits. The inspection was conducted by RBI with reference to the bank’s financial position as on March 31, 2025.
RBI clarified that the penalties relate to regulatory deficiencies and do not affect the validity of customer transactions.