Recorded RBI impact
Fine: Rs 13.3 L
Monetary penalty · Fresh imposition
Published by RBI
20 Jul 2026
Case Brief
By an order dated July 17, 2026, RBI imposed a monetary penalty of Rs 13.30 lakh on Kolhapur District Central Co-op Bank Ltd., Maharashtra. The penalty followed a statutory inspection by NABARD and subsequent supervisory proceedings, in which RBI found that the bank had sanctioned director-related loans, amounting to non-compliance with section 20(1) read with section 56 of the Banking Regulation Act, 1949. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and then sustained the charge, imposing the penalty under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory review found non-compliance with section 20(1) read with section 56 of the Banking Regulation Act, 1949. The sustained charge was that the bank had sanctioned loans related to its directors, leading to action under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act.
Operating Impact
The bank must bear the financial penalty and remain mindful of possible further action, as RBI explicitly stated the penalty is without prejudice to any other action it may initiate. The action does not itself pronounce on the validity of the underlying transactions, but it signals continued supervisory scrutiny of the bank’s lending compliance.
Regulatory Basis
- section 20(1) read with section 56 of the Banking Regulation Act, 1949
- section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Fine: Rs 13.3 L
- Order Date
- 17 Jul 2026
- Effective From
- 17 Jul 2026
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank