RBI imposes monetary penalty on The Nizamabad District Co-operative Central Bank Ltd., Telangana
Case Brief
RBI, by order dated March 25, 2025, imposed a monetary penalty on The Nizamabad District Co-operative Central Bank Ltd., Telangana after a statutory inspection by NABARD and a show-cause proceeding. RBI found that the bank had sanctioned certain director-related loans, which constituted contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949; the penalty was imposed under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Act.
RBI imposed a monetary penalty after a statutory inspection by NABARD and a subsequent show-cause process found a sustained charge that the bank had sanctioned certain director-related loans. RBI stated this amounted to contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949, and imposed the penalty under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the Act.
Severity Assessment
The action is a monetary penalty of ₹1 lakh, which falls in the lowest monetary band and has no operational restriction component.
The bank must absorb the monetary penalty of ₹1 lakh. The order does not itself impose a forward operational restriction, but it signals supervisory concern over director-related lending and may expose the bank to further RBI action.
Published as The Nizamabad District Co-operative Central Bank Ltd., Telangana
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