Thursday proved to be unfavourable for urban cooperative banks as the Reserve Bank of India (RBI) imposed a monetary penalty totalling Rs 24.95 lakh on nine cooperative banks.
The penalized banks include NKGSB Cooperative Bank, Jalna People’s Cooperative Bank, Cooperative Urban Bank (Paralakhemundi), Bagalkot District Central Cooperative Bank, Kerala Mercantile Cooperative Bank, Nizamabad District Cooperative Bank, Sholinghur Cooperative Urban Bank, Tumkur Veerashaiva Cooperative Bank, and Sri Ganesh Cooperative Bank.
By an order dated March 25, 2025, the RBI imposed a Rs 15.00 lakh penalty on NKGSB Co-operative Bank Limited, Mumbai, for non-compliance with directions related to ‘Management of Advances – UCBs’.
Additionally, The Jalna People’s Cooperative Bank Ltd., Jalna, Maharashtra, was fined Rs 0.75 lakh for failing to comply with RBI’s guidelines on ‘Gold Loan – Bullet Repayment – Primary (Urban) Co-operative Banks (UCBs)’.
By an order dated March 13, 2025, the RBI levied a Rs 2.70 lakh penalty on The Co-operative Urban Bank Ltd., Paralakhemundi, Odisha, for violations concerning ‘Exposure Norms and Statutory / Other Restrictions- UCBs’ and ‘Membership of Credit Information Companies (CICs) by Co-operative Banks’.
On March 25, 2025, Bagalkot District Central Co-operative Bank Ltd., Karnataka, faced a Rs 1.00 lakh penalty for contravening Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
Kerala Mercantile Co-operative Bank Ltd., Kozhikode, Kerala, was fined Rs 50,000 for failing to adhere to RBI’s ‘Supervisory Action Framework (SAF)’ guidelines.
Similarly, The Nizamabad District Co-operative Central Bank Ltd., Telangana, incurred a Rs 1.00 lakh penalty for contravening Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act).
On March 26, 2025, The Sholinghur Co-operative Urban Bank Limited, Vellore, Tamil Nadu, was penalized Rs 1.00 lakh for non-compliance with RBI’s guidelines on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Know Your Customer (KYC)’ regulations.
Furthermore, The Tumkur Veerashaiva Co-operative Bank Ltd., Karnataka, was fined Rs 50,000 for failing to comply with directives under the ‘Supervisory Action Framework (SAF)’.
Lastly, Sri Ganesh Co-operative Bank Limited, Gulbarga, Karnataka, received a Rs 2.50 lakh penalty for violating RBI’s instructions on ‘Exposure Norms and Statutory / Other Restrictions – UCBs’ and ‘Donations / Contributions for Public / Charitable purposes out of profits of UCBs’.
Who will fine RBI