In a move underscoring strict regulatory oversight, the Reserve Bank of India (RBI) has levied monetary penalties on four cooperative banks for violations of banking norms and non-compliance with regulatory directions.
On September 29, 2025, RBI imposed a penalty of Rs 1 lakh each on The Hassan District Co-operative Central Bank Ltd., Karnataka, and The Vaniyambadi Town Co-operative Bank Ltd., Tamil Nadu.
The Hassan bank was penalized for contravening provisions of Section 19 read with Section 56 of the Banking Regulation Act, 1949, along with lapses in adherence to ‘Know Your Customer (KYC)’ guidelines. Vaniyambadi Town Cooperative Bank faced penalties for failing to comply with specific directives under the Supervisory Action Framework (SAF) and KYC norms.
Meanwhile, The Bagalkot District Central Co-operative Bank Ltd., Karnataka, was fined Rs 5.50 lakh for violations of Sections 20 read with Section 56 of the Banking Regulation Act and non-compliance with NABARD guidelines regarding the submission of Offsite Surveillance System (OSS) / FMS returns.
Further, on September 30, 2025, The Ranuj Nagrik Sahakari Bank Ltd., Gujarat, was penalized Rs 3 lakh for failing to comply with RBI directions on ‘Management of Advances for UCBs’ and safeguarding customers’ interests in unauthorized electronic banking transactions. The penalty was imposed under Sections 46(4)(i), 47A(1)(c), and 56 of the Banking Regulation Act, 1949.
Unity Small Finance Bank is also not adhering to guidelines & directions as to application of interest on Reinvestment FDs when the Maturity Values donot tally with the calculations derived by RBI/IBA methods as reflected on its Web or its own arbitrary formulae or its online calculator, this is guilty of violations of banking norms and non-compliance with regulatory directions.
THESE COOP BANKS SHOULD BE MERGED IN THE VARIOUS STATE AS THESE BANKS ARE A HINDRANCE TO PUBLIC DEPOSITS