The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 13.30 lakh on Sindhudurg District Central Co-operative Bank Ltd., Maharashtra, for violating provisions of the Banking Regulation Act, 1949 by sanctioning a director-related loan.
The penalty was imposed through an order dated July 17, 2026, under Section 47A of the Banking Regulation Act, following supervisory findings arising from the statutory inspection of the bank conducted by NABARD with reference to its financial position as on March 31, 2025.
According to RBI, after reviewing the inspection findings, issuing a show-cause notice and considering the bank’s response, it concluded that the bank had contravened Section 20(1), read with Section 56 of the Banking Regulation Act, by sanctioning a loan related to one of its directors.
RBI clarified that the penalty pertains to deficiencies in statutory compliance and does not question the validity of any customer transactions or agreements. The central bank also stated that the monetary penalty is without prejudice to any further regulatory action it may initiate against the bank
