The Reserve Bank of India (RBI) has imposed monetary penalties on two cooperative banks for regulatory lapses, reinforcing its focus on compliance and governance in the sector.
A penalty of Rs 1.50 lakh was imposed on the Davanagere District Central Co-operative Bank Limited for violating provisions of the Banking Regulation Act, 1949 and failing to comply with Know Your Customer (KYC) norms.
The irregularities, identified during an inspection by National Bank for Agriculture and Rural Development as of March 31, 2025, included holding shares in other co-operatives, issuing multiple customer IDs instead of a Unique Customer Identification Code, and delays in uploading KYC data to the Central KYC Records Registry (CKYCR).
In a separate action, RBI fined Nagar Sahakari Bank Limited Rs 3 lakh for violations related to director-linked lending, improper NPA classification, breach of exposure limits, and KYC non-compliance.
RBI clarified that the penalties are based on compliance deficiencies and do not impact customer transactions, while further action may follow if required.