Recorded RBI impact
Fine: Rs 1.00 L
Monetary penalty · Fresh imposition
Published by RBI
29 Jun 2026
Case Brief
RBI, by order dated June 25, 2026, imposed a monetary penalty of ₹1 lakh on The Chikmagalur District Co-operative Central Bank Ltd., Karnataka. The penalty followed a statutory inspection by NABARD with reference to the bank’s financial position as on March 31, 2025, and subsequent supervisory proceedings. RBI found that the bank had sanctioned director-related loans, constituting 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 BR Act.
Why RBI Acted
RBI imposed a monetary penalty after a statutory inspection and supervisory review found that the bank had sanctioned loans to directors, which contravened Section 20 read with Section 56 of the Banking Regulation Act, 1949. The action was taken under Section 47A(1)(c) read with Sections 46(4)(i) and 56 of the BR Act, after considering the bank’s reply and oral submissions.
Operating Impact
The bank must absorb the financial penalty and address the compliance lapse identified by RBI. The order does not describe a business restriction or license action, but it may be followed by additional regulatory action if RBI deems necessary.
Regulatory Basis
- Section 20 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 1.00 L
- Order Date
- 25 Jun 2026
- Effective From
- 25 Jun 2026
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Co-operative bank