Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
5 Jun 2025
Case Brief
By an order dated June 4, 2025, RBI imposed a monetary penalty of ₹1 lakh on The Adilabad District Co-operative Central Bank Ltd., Telangana. The penalty was levied after NABARD’s statutory inspection and subsequent supervisory process found that the bank had contravened Section 20 read with Section 56 of the Banking Regulation Act, 1949 by sanctioning loans to its directors. RBI issued a show-cause notice, considered the bank’s reply and oral submissions, and sustained the charge 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 follow-up found contravention of Section 20 read with Section 56 of the Banking Regulation Act, 1949. The sustained charge was that the bank had sanctioned loans to its directors, in breach of the statutory provisions; 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 bear the monetary penalty, but the release does not announce any restriction on its operations, licence, or business activities. The order is based on statutory non-compliance and leaves RBI free to initiate any other action separately, if warranted.
Regulatory Basis
- Section 20 read with Section 56 of the Banking Regulation Act, 1949 (BR Act)
- Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act
Action Facts
- Primary Impact
- Fine: Rs 1.00 L
- Order Date
- 4 Jun 2025
- Effective From
- 4 Jun 2025
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank