Recorded RBI impact
Fine: Rs 7.00 L
Monetary penalty · Fresh imposition
Published by RBI
27 Jul 2026
Case Brief
By an order dated July 23, 2026, RBI imposed a monetary penalty of ₹7 lakh on Sangli District Central Co-operative Bank Ltd., Maharashtra. The penalty followed a statutory inspection by NABARD and a show-cause process, after which RBI concluded that the bank had sanctioned director-related loans, contravening section 20(1) read with section 56 of the Banking Regulation Act, 1949. RBI stated that the penalty was imposed under section 47A(1)(c) read with sections 46(4)(i) and 56 of the BR Act and that the action was based on statutory-compliance deficiencies.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection by NABARD found contravention of statutory provisions. Following a show-cause notice, the bank’s reply and submissions were considered, and RBI sustained the charge that the bank had sanctioned director-related loans, violating section 20(1) 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 BR Act.
Operating Impact
The bank must absorb the monetary penalty and may face further RBI action, as the press release explicitly says this penalty is without prejudice to any other action that may be initiated. The order does not state any immediate operational restriction on depositors or customers.
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 BR Act
Action Facts
- Primary Impact
- Fine: Rs 7.00 L
- Order Date
- 23 Jul 2026
- Effective From
- 23 Jul 2026
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank