RBI imposes monetary penalty on The Pragathi Co-operative Bank Limited, Karnataka

Case Brief

RBI, by order dated August 20, 2026, imposed a monetary penalty of ₹2 lakh on The Pragathi Co-operative Bank Limited, Karnataka. The penalty was imposed for contravention of section 20 read with section 56 of the Banking Regulation Act, 1949 and for non-compliance with RBI directions relating to loans and advances to directors and their related concerns, exposure norms and statutory/other restrictions for urban co-operative banks, and classification/valuation/operation of the investment portfolio. RBI said its inspection, conducted with reference to the bank's position as on March 31, 2025, revealed sustained charges including sanctioning director-related loans and breaching single borrower exposure, inter-bank gross exposure, and inter-bank counter-party limits. The penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.